2023-09-20 22:09:09
The number of mortgages taken out in the first half of this year is considerably smaller than last year. The number of re-closures and leaflets in particular fell sharply, the Land Registry reports. The cause of this is the increased interest rates.
At the beginning of last year, mortgage rates were still around 1.5 percent, if you wanted to fix your interest rate for twenty years, for example. Over the course of last year, interest rates quickly rose to around 4 percent.
During that period, many homeowners wanted to take out a mortgage because they might then borrow at more favorable rates. This involved both refinancing the mortgage and homeowners taking out an additional mortgage to, for example, improve sustainability or renovate.
That has been much less in recent quarters. In total, only regarding 150,000 mortgages were taken out in the first six months of this year. That was 40 percent less than the 250,000 of a year earlier.
In particular, re-enclosing and re-enclosing was not that popular. This happened 76 percent less often than in the first half of last year. The number of mortgages for the purchase of a house fell less rapidly, by ‘only’ 16 percent. The increased interest rate also plays a role here, because it meant that buyers might borrow less.
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First-time buyers pay a larger portion of the purchase price of the mortgage
The Land Registry data also show that home buyers financed a larger part of the purchase price with a mortgage this year: 86.9 percent compared to 85.5 percent in the second half of last year. It was the first time in three years that this increased.
First-time buyers in particular have to rely more and more on mortgages. More than 92 percent of those who bought a house for the first time financed it with a mortgage in the first half of this year.
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