Weak October for homebuyers

Homebuyer activity slowed in October though remortgaging was strong, Council of Mortgage Lenders research shows.

There were £10.5bn loans for house purchase, down 8% from September and 11% from the same month last year.

However remortgage activity remained strong at £6.1bn, rising by 11% from the month before and 7% year-on-year.

Buy-to-let wise landlords borrowed £3bn, up 7% from the month before – but this still represents a 21% fall year-on-year, reflecting how the market has been dampened in the past year.

As family and friends enjoy Rockin’ Around the Christmas Tree landlords will reflect on a year where they had to cope with the 3% stamp duty surcharge introduced in April and promises of further measures in the form of tax changes and stress tests in the new year.

Paul Smee, director general of the CML, said: “These lower volumes are likely to be the ‘new normal’.

“Homeowner and buy-to-let remortgage lending, however, has recovered and is running at its strongest levels since 2009.

“This appears to be linked to borrowers taking advantage of the repricing of mortgages following the base rate cut.”

Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Remortgaging figures continue to rise annually as consumers take advantage of the record low fixed rates dominating the market.

“This demonstrates how proactive borrowers, in conjunction with mortgage brokers, can make the market work for them.

“Although this boost is to be welcomed, the housing market remains burdened with spiralling property prices affecting affordability levels.

“The amount that home-buyers need to borrow continues to rise year on year. The supply/demand issue is still a huge factor in the housing market and although the recent promise of additional funding from the government for new homes is good news, it is imperative that we see this pledge realised.

“The clock is ticking and we must see real action in the halls of Westminster.”