Landlord News

UK Finance’s latest Mortgage Trends show increased interest in buy-to-let mortgages

Em Morley - September 19, 2019

The latest mortgage data for UK Finance’s lending trendshas been released, showing an increase in buy-to-let mortgages completed.

The highlights include:

  • There was a 5.8% increase in new first-time buyer mortgages completed in July 2019, compared to the same month in 2018.
  • There were 7.1% fewer new mortgages with additional borrowing in July 2019 than in the same month 2018.
  • There was a 5.5% increase in new buy-to-let home purchase mortgages completed in July 2019, compared to the same month in 2018.

Sam Harhat, Head of Financial Services at Andrews Property Group, has commented on this new data: “A collapse in remortgaging activity points to the rapidly rising popularity of product transfers but consumers need to be very careful with these. 

“They may feel like the easy route for those reaching the end of their fixed term but product transfers with an existing lender, however attractive and good value they seem, will rarely be the most competitive option.

“It’s no surprise that first time buyers are still at the forefront of the market.

“The real surprise is a robust increase in activity by landlords, who are normally a bellwether to watch when it comes to economic uncertainty.

“Lenders are competing very hard for business and the result is we’re seeing a lot of innovation, especially surrounding self-employed mortgages and limited company buy-to-let.

“Despite the uncertainty surrounding our potential exit from the EU, more and more people are simply getting on with their lives.

“Property prices are competitive, the jobs market is strong and mortgage rates have once again nudged down in recent months. 

“We’re seeing a definitive shift towards 5-year fixes, which can be as low as just over 2%. These fixes offer medium-term peace of mind, which for many people in the current climate is crucial.”

Shaun Church Director at Private Finance, has also commented: “As existing homeowners approach the UK property market with a slight sense of caution, first-time buyers continue to be emboldened by the current market conditions with the value of lending to first-time buyers reaching the highest level seen so far in 2019.

“The traditional barriers that have long been blocking many first-time buyers from purchasing a home over the years are eroding. House prices are easing, stamp duty has been taken out of the equation for many and mortgage rates have fallen considerably.

“The challenge of raising a sizeable deposit – which has typically been the greatest obstacle facing first-time buyers – has been minimised or removed altogether thanks to the flurry of 90-95% mortgages and launch of 100% mortgages.

“The options available to assist first-time buyers have arguably never been greater. The advice of an independent mortgage broker is therefore crucial for prospective homeowners to help them navigate this field of choice and ensure they’re making decisions best suited to their finances and future goals.”