First-Time Buyer and Re-Mortgaging Drive Mortgage Lending Activity

First-Time Buyer and Re-Mortgaging Drive Mortgage Lending Activity

Figures on mortgage lending from the British Bankers Association (BBA) highlighted that in recent months, re-mortgaging activity has been improving. Specifically, in December 2016 and January 2017, around 30,000 re-mortgages were approved by UK lenders. The January total of 28,862 was 16% higher than a year earlier.

The reason for the increase in existing home-owners choosing to re-mortgage on a new deal now? The incredibly low rates available while the Bank of England’s base rate remains at a record low of 0.25%. In fact, the Bank of England’s mortgage interest rate data shows that the average 2-year fixed rate for a 75% loan-to-value mortgage has been around record lows for four months now, hovering between 1.42% and 1.45%. With those kinds of deals available, it’s no real surprise that home-owners have been re-financing in their droves!

Those low interest rates – combined with a bit more availability of the right kind of properties – have also encouraged am increase in first-time buyer activity, according to the Council of Mortgage Lenders. Their data suggests that while many Buy-to-Let (BTL) investors have taken a breather in their purchasing activity, first-timers are taking advantage of that and buying the types of homes that both groups are typically interested in.

Home-movers, meanwhile, are expected to stay put for much of the year, awaiting more certainty over an increase in supply – and hopefully affordability at the higher end of the market.

UK Home-Owner Occupiers at 30-year Low

The UK Government’s latest English Housing Survey for 2015-16 highlighted a familiar problem with the UK’s housing market – affordability. According to the latest report, home-owner occupiers made up 63% – or 14.3 million – of England’s 22.8 million households. That’s the lowest proportion in 30 years and is the 13th year the number of home-owner occupiers in England has fallen.

The report also shows that the private rental sector (PRS) now houses 20% of England’s households while the social rental sector accounts for the remaining 17%. In addition, an increasing number of families with children are also turning to the PRS, while fewer families with children can find homes in social housing.

Given the continually growing importance of the PRS across the whole of the UK, not just England, and the Government’s inability to provide enough affordable homes for those who need them, there has to be the possibility that the Government will work towards providing more support for BTL investors as well as build-to-rent businesses.

In the meantime, though, why not take a look at what’s available at one of our next auctions? There’s always a good cross-section of properties on our books, many of which are perfect for developing or the BTL market.

We hope you enjoyed Surelock Network Auctions’ thoughts on the issues discussed in our latest newsletter. If you want to keep up-to-date with Surelock’s auction dates visit our website and to keep abreast of our news and views, take a look at the blog section.

We welcome any comments on the points we have mentioned, or any questions at all, even about a property you are interested in that isn’t listed at one of our auctions. Additionally, if you want to share your own views on another topic, please contact us. You can get in touch by responding to this email, tweeting us @KhalidAuctions or commenting on the blog section of the Surelock Network Auctions website.

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