Uncertainty causes mortgage market slowdown

First-time buyer and homemover mortgage numbers dropped slightly in June, with many people putting their plans on hold due to current political and economic uncertainty.Homemover numbers were down 3.6% in June compared to the same month in 2018, according to latest figures from trade body UK Finance, with 31,000 mortgages completed. Buy-to-let mortgage numbers also fell, with 5,300 new buy-to-let mortgages completed, 3.6% fewer than this time last year.First-time buyer numbers see smaller decreaseThere were 32,760 new first-time buyer mortgages completed in June, 1.5% fewer than in the same month last year, UK Finance said. However, despite June’s small dip, separate research by Yorkshire Building Society found that the number of people buying their first home has increased by more than 136% over the past decade. The number of first-time buyers in the first half of 2019 reached 170,080, the building society said, an increase of 3% on the same period last year and highest figure since the same period in 2007, before the start of the financial crisis. Remortgages with extra borrowing upThere were 16,880 new remortgages with additional borrowing in June, UK Finance said, up 8.3% compared to the same month last year. The average additional amount borrowed was £56,100. In contrast, pound-for-pound remortgages, where borrowers switch to a different deal without borrowing any additional funds, fell by 23.9% in June compared to the same month in 2018, with just 15,320 deals completed.Borrowers lock into longer term dealsGrowing numbers of borrowers are taking out longer term five-year fixed rate mortgages when buying a home or remortgaging. This may partly explain the fall in pound-for-pound remortgaging activity. According to UK Finance, in June 2018 the number of five-year fixed rate mortgages overtook the number of two-year deals for the first time. Five-year fixes are the most popular product for new mortgages. Many borrowers are also choosing to switch products with their existing lender rather than remortgage elsewhere, which could also be driving the fall in remortgage numbers.