Home owners ‘improving rather than moving’, figures suggest

Mortgage lending to home movers was down annually in May amid signs that households are improving by borrowing extra cash, rather than moving.

Some 29,430 home mover mortgages were completed in May – 1.2% fewer than in the same month a year earlier, UK Finance said.

Meanwhile, the number of re-mortgages where households borrowed extra cash jumped by a fifth year-on-year.

There were 21,370 new re-mortgages with additional borrowing in May, 19.8% more than in the same month in 2018.

For these re-mortgages, the average additional amount borrowed in May was £52,000.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said UK Finance’s figures confirm “a trend we are seeing – that people are keen to stay put and improve or extend, rather than go to the considerable cost of moving to another property.

“Some borrowers are also releasing extra cash to help children or grandchildren onto the housing ladder or to cover other costs such as school fees, with older borrowers in particular taking advantage of the sizeable equity they have built up in their homes over time.”

Some 19,650 “pound for pound” re-mortgages with no additional borrowing were recorded – 19.7% more than in May 2018 – as home owners came to the end of their existing deals.

UK Finance also said 30,720 new first-time buyer mortgages were completed in May – 0.5% more than in the same month in 2018.

In the buy-to-let sector, there were 5,500 new home purchase mortgages completed in May – the same as a year earlier.

Buy-to-let re-mortgaging increased by 2% annually, with 15,000 re-mortgages in May.