It's a great time for the mortgage market at the moment. Not only have average mortgage rates fallen further this month to hit fresh lows yet again, but new figures from the Council of Mortgage Lenders (CML) and Office for National Statistics (ONS) reveal positivity in terms of lending growth and price rises, too, so it's certainly a great time to be a borrower!
Latest figures from the CML show that December saw annual growth across all sectors of mortgage lending, despite some areas seeing a monthly drop. And it seems that a growing number of prospective buyers are able to take that first step, with first-time buyer lending seeing the biggest monthly rise.
A total of £4.5bn was lent to first-time buyers in the month, marking an increase of 7% from November, as well as an 18% rise year-on-year. The number of mortgages advanced to these new borrowers (29,300) also saw healthy monthly and annual growth, up by 6% and 11% respectively.
Meanwhile, homemovers borrowed a grand total of £6.6bn, up 2% month-on-month and 20% from December 2014, while the number of mortgages advanced to these homeowners (33,400) grew by 3% and 12% respectively. Remortgage activity was more subdued on a monthly basis (down 16% by both volume and value), but on an annual basis it saw the strongest growth of any sector, with the value of remortgages advanced standing at £4.2bn, an increase of 24% year-on-year.
Given the positive state of the market at the moment, it's perhaps no wonder that so many more people have been taking the plunge with a record-breaking mortgage deal. The huge number of products available means there's plenty of choice, while the incredibly low rates on offer mean borrowers could save a small fortune, particularly those who are choosing to remortgage.
Our figures show that the average fixed mortgage rate of two years ago stood at 3.49%, while the standard variable rate (SVR) of today is 4.81%. This means that borrowers who are approaching the end of a two-year fixed rate deal would be faced with a rate rise of 1.32% if they chose to revert, but conversely, if they remortgaged to today's average two-year deal, which has a rate of 2.54%, they'd be able to enjoy a potential drop of 0.95%. So why wouldn't you remortgage?
In even better news, it seems that UK house price rises are slowing somewhat, which will come as welcome news to those trying to get on the ladder – or even those hoping to take a cost-effective step up. The figures, from the ONS, show that UK house prices rose by 6.7% in the year to December 2015, a clear slowdown from the growth of 7.7% recorded in the year to November.
Prices also dipped on a monthly basis, falling by 0.2% between November and December, which marks the first monthly decline since April 2015, and brings the price of a typical UK property to £288,000 (down from £289,000 in November). While that kind of price may seem out of reach for some, it's important to remember that it's just an average, taken over all property types and all parts of the country, and the slowdown in price growth will be particularly welcome for many.
Really, there may never have been a better time to get in on the action – not only are mortgage rates at record lows, but prices aren't rising too dramatically, which hopefully means affordability issues won't become too prohibitive. So why not join the increasing number of people getting a new mortgage? Start the process by comparing the top mortgage deals, and you could be one step closer to getting on the next rung of the ladder.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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