The number of people remortgaging has increased by 36% for the year as homeowners lock into new competitive deals.

Demand for new deals from remortgage buyers has increased 36.0% from 30,000 in 2017 to 40,800 in April 2017 according to data from UK Finance ahead of an anticipated interest rate rise.

Remortgaging lending values have increased by 44.2% from £5.2 billion a year ago to £7.5 billion this year and 33.9% more than reported last month.

Jackie Bennett Director of Mortgages at UK Finance said, remortgaging activity bounced back to strong levels in April, as both homeowners and landlords put their house in order by locking into attractive fixed-rate deals ahead of an anticipated interest rate rise.

UK Finance estimate there will be over 400,000 mortgage deals coming to an end between April and June boosting the number of remortgage buyers.

Two speed mortgage market

House purchases including first time buyers and home movers are relatively slow in contrast to remortgage buyers showing strong year-on-year increases.

There were slightly lower numbers of house purchases with 52,000 completed in April 2017 compared to 51,800 this year and the value of lending was unchanged at £9.8 billion.

One reason for much higher remortgaging activity could be in part due to the Bank of England signalling its intent to raise rates from current low levels when the conditions are right, which they did last November to 0.5 per cent.

James Tatch Principal Analytics UK Finance said, it’s likely that the large increase we saw in April’s figures is at least in part a further round of mortgage refinancing ahead of the expected rise of interest rates to come.

Current lower interest rates have benefited older homeowners and equity release buyers can access wealth in their property using a lifetime mortgage to maintain their lifestyle or pay university fees for grandchildren.

The second reason is the stock of mortgages free to refinance without incurring early redemption charges and there are a significant number of borrowers on Standard Variable Rates (SVRs).

If there was a peak in two-year fixed rate mortgages written two years ago, that tranche of mortgages will now be coming to the end of that deal, free from repayment charges and potentially looking for a new deal, says Mr Tatch.

Slower rise in new purchases

The number of first time buyers was 26,700 or 3.5% higher than the same month a year earlier with £4.4 billion of new lending in the month up 4.8% for the year.

Home mover numbers were 25,100 down 4.2% higher than the same month a year earlier with £5.4 billion of new lending in the month lower by 3.5% for the year.

New buy-to-let house purchase mortgages were also poor with 5,000 completed some 5.7% less than last year and lending values were 12.5% down year-on-year.

This was subdued compared to buy-to-let landlord with 14,300 remortgages completed rising 32.4% for the year and lending values up 35.3% for the year.

Jackie Bennett said, the number of first-time buyers has grown year on year, outstripping home movers, which reflects measures such as stamp duty cuts and the Help to Buy scheme focused on getting more people onto the housing ladder.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth for home and garden improvements and holidays of a lifetime.

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