Industry figures on mortgage product transfers alternatively known as rate switches have been published for the first time by UK Finance. The numbers reveal that 390,200 homeowners switched product with their existing provider (product transfers) in the first quarter of 2018 which represents £53.7bn of mortgage debt refinanced internally. These figures do not feature in any market data on remortgaging, or other published gross mortgage lending data.
Of the total number of product transfers, 203,200 transfers, worth £29.5 billion, were conducted on an advised basis and 187,000 transfers, worth £24.2 billion, were execution-only. The figures reflect the Financial Conduct Authority’s (FCA) findings in its interim Mortgages Market Study highlighting that customer engagement is high and the majority of mortgage customer’s switch to a new deal shortly after their previous deal expires. The data also supports the FCA’s observation that most borrowers choose to remain with their current lender when they switch product.
The data suggest that there is a positive outcome for consumers as they can make these transactions in a wide variety of ways to suit their needs. For those who require help in choosing the right product, mortgage advice is widely available from intermediaries, with more than half of borrowers taking advice for their new deal.
First before second
The number of people moving home has dipped in the first half of the year and now account for only around half (49%) of the housing market – the first time homemover numbers have fallen behind first-time buyers since 1995, according to the latest Lloyds Bank Homemover Review.
There were 170,000 homemovers in the first half of 2018, down by 1,700 (1%) compared with the same period last year and down by 33,000 (16%) from the second half of 2017. This inactivity may be being fueled by a shortage of suitable properties for sale but reflects the broader housing market which is showing little sign of movement. The fall in homemover numbers follows a rise in 2017, which reported the highest level of movers in 10 years. This also coincides with a 3% rise in first-time buyers to 175,500, so that for the first time since 1995, just under a half (49%) of all house purchases financed by a mortgage were made by homemovers – down from 62% in the first half of 2011.
Over the past five years, the average price paid by homemovers has grown by 35% (£77,457) from £219,479 in 2013, to £296,936 in 2018 – a record high. The average deposit put down by a homemover has also increased by 31% in the past five years, from £76,303 in 2013 to £99,592 in 2018. Not surprisingly Londoners put down the largest deposit of £189,167 towards the purchase of their next home, which is nearly four times the average homemover deposit of £48,003 in Northern Ireland.
However, whilst Londoners put down the highest deposit in monetary terms, homemovers in the South West and East Anglia contribute the largest deposit as a proportion of average house price – 38% (£117,892 and £116,278 respectively in cash), followed by South East (35%). Of the estimated 23.1 million households in England, 14.4 million (63%) were owner occupiers. This remained unchanged in 2016/17. However, the composition of owner occupation rates has moved towards an increased proportion of outright owners (34%) versus mortgagors (28%), partly explained by large numbers of baby boomers reaching early retirement age. So, whilst homemovers with mortgages are stabilising, the bigger picture may be that this is in part because homemovers who don’t need a mortgage are on the increase.
In 2006-07, about three quarters (72%) of those aged 35-44 were owner occupiers. By 2016-17, this had fallen to half (52%). While owner occupation remains the most prevalent tenure for this age group, there has been a considerable increase in the proportion of 35-44 year olds in the private rented sector (11% to 29%).
Financial fears are creeping into sleeping hours, as new research by Royal London shows money worries are a top cause of nightmares. Two in five (41%) people said money makes them anxious, which can have a big impact on the subconscious. One of the most common types of dreams is teeth falling out (18%). Teeth symbolise power and confidence, with financial concerns leading to nightmares about you losing them as you’re not in control.
The research highlights the link between our dreams and what we get up to when we’re awake; nine in 10 people think real life issues (88%) and their emotions (91%) affect the type of dreams we have. People in the UK take it one step further, with three in 10 (31%) basing real life decisions on dreams or nightmares. Nightmares plague millions of people, with nearly nine in 10 (85%) of us suffering from them. A quarter (23%) suffer from nightmares once a week or more frequently, with falling (40%) and violence (29%) being the more common types of nightmares.
The data also shows a gap between men and women when it comes to dreams, with more than half (56%) of men having based decisions or changed something in their life after a dream in comparison to just a quarter (27%) of women. Two in five men (44%) suffer from nightmares once a week or more frequently in comparison to one in six women (17%). Women (37%) are also more private about sharing their nightmares with other people in comparison to men (27%).
Pets over people
Epoq’s new research into employee-paid and self-paid insurance benefits, reveals that 32% of those surveyed have pet insurance in comparison to 25% with some form of income protection. The research was conducted by Opinium in June 2018 among 1,234 employees from across the UK.
The majority (23%) have paid for the pet insurance themselves, with the remaining 8% receiving it as an employee benefit, in comparison to just 14% of people who choose to pay for income protection themselves (and 12% employer-paid).
This suggests that pet insurance is a form of cover and employee benefit that is valued by employees more than income protection, despite income protection generally considered to be one of the most important forms of insurance for employees to have as it replaces your salary if you can no longer work due to illness or disability.
Employees were more likely to buy pet insurance than critical illness cover (31%), private medical insurance (31%), phone/gadget insurance (30%), dental insurance (25%) or income protection (25%). Bearing in mind all employees surveyed will be earning an income, but not all will have a pet, this seems to be a concerning misallocation of priorities.