Remortgage activity rose in October, but other mortgages dropped

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The rate of remortgages hit record levels in October 2016, but mortgages for purchasing houses were 20% lower than the same month the previous year.

These statistics are the latest figures published by the Council of Mortgage Lenders, and were reported on by The Guardian during December 2016.

The buy-to-let market has also taken a hit. Although buy-to-let lending increased in October from the previous months, it is still down 21% from 2015. Around two thirds of buy-to-let commercial mortgages were remortgages rather than for purchasing new property.

The percentage of borrowers’ income that they use for mortgage repayments has fallen to an all-time low. Both first-time buyers and house movers, on average, spend 17.6% of their salary on mortgage payments. The Director of the Council of Mortgage Lenders, Paul Simm, said that this was due to borrowers benefiting from the mortgage repricing that followed the Bank of England’s base rate cut.

The number of people switching mortgages and remortgaging is at its highest level since January 2009. Remortgage business hit a £6.1bn total in October which is 7% higher than last year, and 11% higher than September.

Commenting on the remortgage figures, the Chief Executive of legal services provider LMS said:

“October was a strong month for the remortgage market, with activity hitting an eight-year high, while the rest of the market stood still. The ramifications of June’s referendum result are hitting home.

“Homeowners are taking advantage of low rates to secure reduced monthly repayments.”

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