The number of people taking out a mortgage to buy a property fell in October, according to the latest figures from the Council for Mortgage Lenders (CML).
Homeowners collectively borrowed £10.5 billion in October this year, an eight per cent fall on the previous month and an 11 per cent drop on the same time in 2015. The CML data also indicates that fewer first-time buyers are getting on the property ladder, with the number of mortgages arranged for this group also eight per cent down month-on-month.
Despite there being fewer buyers on the market, remortgaging has become a more popular option. The CML revealed that remortgaging activity hit £6.1 billion in October, an 11 per cent rise on September.
CML director general Paul Smee explained this is more than likely due to existing homeowners looking to take advantage of more favourable mortgage deals following the base rate cut earlier this year.
He added that things are likely to remain the same for new buyers for the foreseeable future though.
“With lenders now tightening affordability criteria ahead of the Prudential Regulation Authority’s stress tests and the forthcoming tax relief changes next year, these lower volumes are likely to be the new normal,” Mr Smee stated.
But while mortgage lending is falling, it isn’t all bad news for the UK’s property market. Last month a survey by the Royal Institution of Chartered Surveyors found that home buyer interest increased in October for the second consecutive month.
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