Residential remortgages have proven marginally more popular at The Mortgage Broker Limited in the first eight months of 2017, according to new data released by the company. Remortgages accounted for 24.9% of total mortgages taken out over that period, while residential purchases were just behind on 24.5% of the total.
Buy-to-let remortgages also proved to be popular for the first two-thirds of the year, totalling 17.4% of the mortgages approved by the company. First-time buyers came in fourth, with 13.2% of the mortgage total.
Strong figures for both remortgaging and house purchases
“These figures illustrate the market has seen an almost-equal amount of mortgage activity so far this year, covering both remortgages and purchases,” confirmed Darren Pescod, CEO of The Mortgage Broker Limited. “It is not surprising to see some remortgaging going on in the buy-to-let arena either, given the many changes that section of the market has seen recently.”
Indeed, there has also been a minor slice of activity accounted for by buy-to-let limited companies formed by people who want to try and limit the amount of tax they are due to pay on their rental earnings. This accounted for just 0.6% of the total over the first eight months of 2017, but could we see a rise in this in the coming months?
Buy-to-let purchases totalled 6.5% of mortgages granted
The company also found just 6.5% of mortgages were approved for buy-to-let purchases between 1st January and 31st August this year. The remortgaging part of the buy-to-let market is therefore almost three times as active as that dedicated to new purchases in the sector.
Purchases pull ahead of remortgages in one area
However, if first-time buyers are included in the purchase statistics, 37.7% of mortgages approved by the company are for house purchases. Meanwhile, 30.3% of the total business accounts for residential remortgages. The buy-to-let portion of the business takes up nearly a quarter (24.5%).
“Remortgaging has proven to be popular so far this year,” Darren continued. “However, once first-time buyers are included, purchases still top the table in terms of the type of business we have done so far in 2017. And despite the challenges faced by those in the buy-to-let industry, this still takes up almost a quarter of our business. I will be interested to see if there is much change in that figure as we go into the final four months of the year.”
The buy-to-let rule changes have arguably been one of the most challenging aspects of the ever-changing mortgage and home-buying industry this year. As more people switch to limited company formations for buy-to-let, or leave the sector altogether, we are likely to see further changes as time goes on. The new tax rules are being brought in over time, and higher-rate taxpayers are likely to be considering their position before the rules come completely into effect by 2020.
For now, though, remortgages are leading the pack at The Mortgage Broker Ltd this year.