Questions raised over impact of Stamp Duty cut in the capital as home buyer mortgage approvals decline

Remortgaging continued to dominate home lending across some of the main UK regions at the expense of first-time buyers and home movers, UK Finance has revealed.

The trade body for the banking sector has released mortgage lending figures for the second quarter of 2018, covering London, Scotland, Wales and Northern Ireland. It doesn’t compile data for England.

Remortgage approvals in the capital hit a nine-year high at 15,200 in the second quarter, up 16.9% annually.

However, home mover approvals fell 8.1% annually to 6,800 in the second quarter, and first-time buyers saw a 3.7% drop in the capital at 10,300 approvals.

Shaun Church, director at mortgage broker Private Finance, said: “After decades of boom, the lack of home-buyer activity and month-on-month decline of house prices London marks unchartered waters for the capital’s property market.

“Even first-time-buyer activity, which has performed encouragingly throughout 2018, has now declined. This suggests that despite easing house price growth, Stamp Duty exemptions and Help to Buy, affordability remains out of reach for London’s Generation Rent.

“This may translate to greater activity in the commuter belt as would-be buyers seek more affordable properties within reaching distance of the capital.

“Lenders are still displaying a strong appetite to lend, resulting in competitive mortgage rates and deals.

“With house prices easing and rates still favourable, now is an opportune moment for first-time-buyers to make their first step on to the housing ladder – though they may wish to look outside of the capital for more affordable deals.”

This trend was reflected in Scotland and Wales where remortgage approvals increased, but home mover mortgages fell 2.1% and 2.6% respectively, and the number of first-time buyer mortgages declined 3.1% and 2.4% in each country.

Northern Ireland did manage to buck the trend, with first-time buyer approvals at their highest level since 2005, up 9.5% annually to 2,300, while home mover mortgages rose 6.7% to 1,600.

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