Liquid error: wrong number of arguments (2 for 1) Number of home loans in UK in March stable, bank figures show | Marsh & Parsons Sales and Lettings Estate Agents London

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Number of home loans in UK in March stable, bank figures show

Wed 04 May 2016

Thursday, 05 May 2016 The number of loan approvals for house purchases in the UK reached 71,357 in March,broadly in line with the average over the previous six months, according to the latest figures from the Bank ofEngland.

A breakdown of the figures show that the number of approvals for remortgaging was 41,347, comparedto the average of 40,755 over the previous six months while the number of approvals for other purposes was12,875, compared to the average of 12,267 over the previous six months.

According to Kevin Purvey, chairman ofthe Independent Mortgage Lenders Association (IMLA), approvals dipped just slightly from February as the shortterm effect of the buy to let stamp duty surcharge fades away.He pointed out that remortgaging rose slightly overthe average established over the previous six months.Having seen the remortgage market bounce back duringsummer and autumn of 2015, its a positive sign to see it remaining in rude health in the first quarter of 2016. Thisis likely to be influenced by intense competition among mortgage lenders, which has driven mortgage rates downto record lows, he said.

Following house price rises, it means now could be a sensible time to considerremortgaging whether simply to refinance or release equity. We expect remortgaging to be one of the strongestgrowth areas within the mortgage market this year, with home owners looking to remortgage benefitting verymuch from lender competition and the plethora of products available, he added.

David Brown, chief executiveofficer of Marsh & Parsons, said that the first three months of 2016 was by no means a typical quarter. Activity inthe opening three months of this year has been exceptionally skewed by the additional layer of stamp duty forboth buy to let and second home purchases, he pointed out. Naturally, the knee jerk reaction among thesegroups has been to hurry through property purchases before the deadline, and make savings while they can.

Second home owners really jumped to it this spring, and were much more prominent in the market than we wouldtypically expect, he explained.Now that the ruckus has passed, well see much more orderly transactions overthe summer months, as the market rebalances towards first time buyers and other owner occupiers for whom itwill just be business as usual, he added.

Meanwhile, separate research shows that just a third of remortgagorsconsulted a mortgage broker in March and at 35% this was the lowest amount since September, leading toconcerns borrowers may be missing out on best available rates.Overall the number of remortgagors consultingbrokers has declined since the start of the year, according to the latest research from LMS. It fell to just 35% inMarch, the lowest amount since September last year and down from 39% in February.It is also 11% lower thanthe 46% who consulted a broker at the start of the year.

This leads to concerns that borrowers may be missing outon competitive rates or the most suitable products for their circumstances as intermediaries can access productsnot available on the high street.The research report suggests that home owners are more confident in their ownability to make a decision about remortgaging without consulting a broker likely, in part, to low expectations of abase rate rise. Expectations of a rate rise among remortgagors has fallen four percentage points from 16% inFebruary to 12% in March, the lowest recorded by LMS. Despite the competitive rates currently available, thenumber who remortgaged to lower their mortgage rate in March was just 57%, a drop of 11% year on year.

Thepercentage of individuals who remortgaged in March because they came to the end of their current deal fell to45%, a 5% fall compared to the previous month while 28% opted to increase the size of their loan, with 22%increasing the size of their loan by more than 10,000. The research shows that the number of peopleremortgaging who did so to help their children buy a home is now at 3%, up 1% from February and there was a1% month on month fall in the number of people remortgaging to pay off other debts.

There was also a 2% fall inthe number of people opting to remortgage for home improvements, down to 18%.A persistently low base rateand a host of competitive mortgages on offer may be leading many remortgagors to miss out on the bestavailable rates through apathy. After seven years of a historic low rate, there is no sign of an increase in sight,reducing the motivation of homeowners to remortgage or consider their options, said Andy Knee, chief executiveof LMS.

Concerning too, is the fall in the number of remortgagors seeking independent financial advice whenremortgaging. While home owners may feel confident in their ability to remortgage, shopping around is the bestway to ensure you take advantage of the most competitive offers that may enable savings of hundreds of poundseach month, and advice can help to navigate the complexities of the mortgage market to find the most suitableproduct for your circumstances, he explained.

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