U.K. loans for remortgage at highest level in a decade on Brexit uncertainty
The number of UK loans issued for remortgage during the third quarter was 120,400, the highest level since Q3 2008, as homeowners adopt a ‘wait-and-see’ approach amid uncertainty over Britain’s future relationship with the European Union.
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In a sign that property owners are also reacting to the possibility that interest rates will rise in 2019, banks agreed 299,700 fixed rate mortgages both for house purchase and remortgage during Q3, the highest level since Q4 2008, according to the data from UK Finance. Fixed rate deals accounted for 95% of all lending at an average rate of 2.24%.
“Rates are starting to creep up for the first time in a while and it’s driving a higher number of people onto fixed rates,” said Simon Gammon, managing partner at Knight Frank Finance. “I think we’ll continue to see this trend over at least the next three to six months, or until there is any more clarity over the future of Brexit.”
Increased levels of remortgaging fits with the broader trend towards staying in one property for longer. Long-term factors such as higher levels of stamp duty and stricter rules on mortgage lending are combining with a reluctance to move ahead of key Brexit decisions, prompting more homeowners to delay decision-making.
Read Knight Frank’s house price forecasts here.
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