Was mortgage activity affected by the base rate rise?
Recent research has shown that there was a steady rise in both first-time buyer and home mover mortgage lending in November last year despite the base rate rise.
According to figures from UK Finance, the number of first time buyer mortgages reached 34,800 during the penultimate month of the year, a monthly growth of 15.2%. New lending for this group also saw a rise, with the total growing annually by 16.7% to £5.6 billion.
November also saw the number of new home mover mortgages increase to 36,200 – an approximate rise of 16.8% on a yearly basis. Where new lending was concerned for home movers, there was an annual increase of 19% to £7.5 billion.
However, buy-to-let house purchase mortgages actually saw a decline in November, with the total falling by around 1.5% to 6,600 from last year. The value of this remained relatively stable when compared to the previous year, with lending reaching £0.9 billion.
Commenting on the figures was Paul Smee. The Head of Mortgages at UK Finance stated that whilst homeowner and new buyer mortgages seemed relatively unaffected by the base rate rise, buy-to-let lending activity had weakened. He did also draw attention to the wider factors which this could be attributed to, stating: “The data shows housing market activity remains buoyant, despite November’s rise in the base rate. Steady increases in lending for house purchases together with increases in homeowner remortgages reflect a keenness among consumers to benefit from still historically low interest rates, and a highly competitive marketplace.
In contrast, declines in buy-to-let lending reflect the changing regulatory and fiscal environment for landlord businesses, where some landlords might be inclined to reappraise the viability of their portfolios.”