End of Summer Boost to Housing Market from First Time Home Buyers

End of Summer Boost to Housing Market from First Time Home Buyers

The Summer of 2019 was the summer of first time home buyers. The housing market was boosted out of the Brexit doldrums by the demand from first time buyers eager to take advantage of low interest rates, lower asking costs, and mortgage products offering lower deposits. The ability to get on the property ladder was easier this summer for many hopefuls that were able to become homeowners.

UK Finance data released on the housing market revealed that there were a bit over 35,000 new first time home buyer mortgages completed in August. This is the highest total since August 2007. The volume was 0.7% higher than August of last year.

Homeowners are seeing fit to stay put rather than moving home. There was a decline of 5.5% annually of home mover mortgages. Buy to let mortgages declined by 3.3% and landlord remortgages declined as well by 0.7% over the last 12 months.

Remortgage lending volume amounted to 18,640 new remortgages with additional borrowing attached to the deal. The average additional borrowing through remortgaging amounted to £55,000 in August. The volume of remortgages with no additional borrowing was at 18,100.

Nick Chadbourne, CEO of LMS, remarked on the data, “We should see remortgage activity continue to climb in Q4, with a significant peak expected across October and November due to early redemption charge expiry dates. Remortgaging will continue to outperform other areas of the market, with the majority of borrowers opting for the certainty of a fixed-term deal.

“It remains to be seen whether the market’s increasing attention on 10-year fixes will result in significant product purchasing changes. The latest LMS data shows that 10-year fixed deals make up just 5% of all remortgage deals, but we could see this figure climb as low rates remain attractive to borrowers.”

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