The number of remortgage buyers locking into attractive deals has increased 23% ahead of the Bank of England rate rise.

More remortgage buyers are securing fixed rate deals according to figures from UK Finance with 46,900 in July 2018 rising 23.1% from 38,100 in the same month last year.

The Bank of England is planning the next interest rate rise and homeowners are rushing to lock into cheaper loans with the value of loans up 26.0% year-on-year from £6.9 billion to £8.7 billion.

In August the Monetary Policy Committee voted to raise interest rates a quarter of a percent from 0.5% to 0.75%, the first rise since March 2009.

Jackie Bennett Director of Mortgages at UK Finance said, there was considerable growth in remortgaging from buy-to-let landlords up 14.1% over the month to 5,500 and loan values of £2.4 billion.

Fewer people moving home

The number of home movers reduced 3.8% from 33,900 a year ago to 32,600 for the month of July although by value of loans remained unchanged at £7.3 billion.

Fewer suitable homes could in part be due to higher activity with older equity release buyers accessing wealth in their property with a lifetime mortgage rather than downsizing.

The average age of home movers is 39 with average household disposable income of £56,570 buying a property valued at £259,550 and placing a deposit of £70,551.

On average home movers borrow £185,999 which has increased 3.3% year-on-year and income to loan multiples are slightly higher at 3.43 compared to 3.38.

The proportion of loan to value (LTV) is 72.5% and homeowners use 17.7% of their household income to service capital and interest repayments.

Many remortgage buyers will stay in their existing house securing an attractive mortgage deal, avoiding the cost of moving until there is more choice of homes on the market.

Affordability limits new buyers

Over the month the number of first time buyers has reduced 9.2% from 34,600 to 31,400 in July 2018 and this is 1.0% lower than this time last year and value of loans is 5.8% higher at £5.4 billion.

For many prospective borrowers affordability remains a challenge says Jackie Bennett, underlining the importance of clarity over the future of schemes such as Help to Buy.

Household income for first time buyers is 2.6% higher than a year ago at £42,103 and income to loan multiples are fractionally higher at 3.67.

The average for a new homeowner is 30 buying a property valued at £170,588 and placing a deposit of £25,588.

According to the Royal Institute of Chartered Surveyors (Rics) there are a mix of reasons for lower property demand including affordability constraints, a lack of stock, economic uncertainty and interest rate rises.

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.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release mortgage calculator, mortgage cost calculators, and property value tracker chart.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle, pay for care at home or even buy a more expensive home.