Derin Clark

Derin Clark

Online Reporter
Published: 19/11/2019

More mortgage completions were made by first-time buyers than homemovers during September 2019, data released by UK Finance reveals.

The data shows that there were 29,100 new first-time buyer mortgage completions in September 2019 compared to 29,050 homemover mortgages completed, which were increases of 1.6% and 1.8% respectively compared to the same month the previous year.

While there was just a small difference between first-time buyer and homemover mortgage completions, historically homemovers mortgages outnumbered first-time buyers. In fact, research carried out by Moneyfacts.co.uk – using UK Finance data – found that in August there were 35,380 homemover residential mortgages compared to 35,010 first-time buyers, a difference of 370; whereas five years ago, in 2015, there were 33,800 homemover residential mortgages compared to just 26,800 first-time buyers – a difference of 7,000.

The reason for the growth in first-time buyers could be due to a combination of factors. The current stagnation of the housing market, particularly in the south-east of England, will have helped to make getting onto the housing ladder more affordable for first-time buyers. In addition to this, new buyers have also benefited from a number of Government schemes aimed at first-time buyers, such as the Help to Buy equity loan scheme. As well as this, competition between mortgage lenders has been particularly fierce this year, with first-time buyers benefiting from competitively low rates.

Remortgages on the rise

While the growth in homemover mortgages might have slowed, data from UK Finance shows that remortgages are on the rise. In September 2019, there were 19,140 remortgages where the borrower did not take out any additional borrowing, an increase of 8% on the same month in 2018. There has also been a rise in those remortgaging with additional borrowing with 17,740 of these mortgages in September 2019, up 5.9% on the same month the previous year. The average additional amount borrowed in September was £50,000 and this could suggest that more homeowners are looking to improve their current home rather than moving to a different property.

Credit card spending

UK Finance has also released data on consumers credit card spending, which shows that in August 2019 there were 290 million transactions on UK cardholders’ credit cards, a 3.8% increase compared to August 2018. While the number of transactions has increased, the amount spent on credit cards has remained similar year-on-year, with a total spend of £16.3bn in August 2019. In addition to this, the outstanding balance on credit cards stood at 3.6% in August 2019, which continues its downward trend from its peak of 8.3% at the start of 2018 and, according to UK Finance, is a positive sign that consumers are effectively managing their credit card debt.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “It’s positive to see a fall in the amount of debt on credit cards, but there still might be consumers out there worried about using the plastic to cover their monthly essentials. It’s important that borrowers make the effort to seek debt advice if this is the case and work hard to get themselves out of a debt spiral. As we edge closer to the festive period, consumers may borrow more on credit cards if they have little to no savings to cover the cost of Christmas. Borrowers would be wise to keep a close eye on their outgoings this time of year or they may have to move their debts to an interest-free balance transfer card so give them more time to repay their debts.”  

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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