Lending to first time buyers and movers reached decade high in February

Mortgage lending for first time buyers, home movers and remortgagors increased in February 2018 compared to the previous year, the latest figures from the trade body for UK lenders. Total home owner purchases, which combine both home movers and first time buyers, reached 50,000, the highest level for the month of February since 2007, according to the data from UK Finance. There were 25,200 first time buyer mortgages completed in February 2018, some 2.4% more than in the same month a year earlier. The £4 billion of new lending in the month was up 2.6% year on year and the data also shows that average first time buyer is aged 30 with a gross household income of £41,000. There were 24,800 home mover mortgages completed in the month, the same as in February 2017 while the £5.3 billion of new lending in the month was 1.9% more year on year. The average home mover is 39 and has a gross household income of £55,000. There were 35,400 home owner remortgages completed in the month, some 11.3% more than February 2017 and the £6 billion of remortgaging in the month was 11.1% more year on year. But the buy to let mortgage purchase market continues to struggle. There were 5,200 buy to let home purchase mortgages completed in February, down 8.8% on in the same month a year earlier. By value this was £0.7 billion of lending in the month, down 12.5% year on year. However, buy to let remortgages are more robust. There were 14,100 buy to let remortgages completed in February, up 20.5% year on year while by value this was £2.2 billion of lending in the month, up 15.8% compared to a year ago. According to Jackie Bennett, director of mortgages at UK Finance the stronger annual figures indicate the market is picking up with purchases by first time buyers and home movers reaching their highest levels for February in over a decade. ‘Remortgages are also up year on year, as home owners look to fix costs amid anticipation of further interest rate rises. Meanwhile the buy to let market continues to operate at stable but subdued levels, due in part to the impact of recent legislative and tax changes,’ she added. New products on the market at a time when interest rates are still very low have contributed to favourable conditions for borrowers, according to Danny Belton, head of lender relationships at the Legal & General Mortgage Club. But it is not all good news for buy to let landlords, according to Mark Posniak, managing director of specialist lender Octane Capital. He believes that the rise in buy to let remortgage activity reflects how landlords, especially amateur ones, are refinancing their portfolios simply to keep their heads above water. ‘Yields have been decimated by the recent spate of tax and legislative changes, and for more geared landlords remortgaging is absolutely essential to maintaining a viable portfolio. Many amateur landlords are reducing their exposure or exiting the sector altogether, while professional, increasingly institutional landlords, are piling in because they have the financial strength, expertise and scaleability to make it work,’ he said.