The number of real estate loans obtained in the first half of this year was much lower than last year. The Land Registry reported that the number of re-closings and publications in particular decreased sharply. The reason for this is high interest rates.
At the beginning of last year, mortgage rates were still around 1.5 percent, if you wanted to lock in an interest rate for twenty years, for example. Over the past year, interest rates have risen rapidly to around 4 percent.
During that period, many homeowners wanted a mortgage because they could then borrow at more favorable interest rates. This included mortgage refinancing and homeowners taking out an additional mortgage, for example, to improve sustainability or renovate.
This was much lower in recent quarters. In total, only about 150,000 mortgages were taken out in the first six months of this year. That was 40 percent less than the 250,000 the previous year.
In particular, re-embedding and re-embedding were not very common. This happened 76 percent less than in the first half of last year. The number of mortgages for home purchases fell less quickly, by only 16%. The rising interest rate also plays a role here, because it means buyers can borrow less money.
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First-time buyers pay a larger portion of the mortgage purchase price
Land Registry data also shows that homebuyers financed a larger portion of the purchase price with a mortgage this year: 86.9 percent compared to 85.5 percent in the second half of last year. This was the first time in three years that this number had risen.
First-time buyers in particular are having to rely more and more on mortgages. More than 92% of first-time homebuyers financed it with a mortgage in the first half of this year.
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