What you need to know

2018 marked the second year of slowing growth in the mortgage market, with gross lending rising 3.4% to £269 billion, after growing by 5.6% in 2017, and 11% in 2016. Weak growth in the value of new loans for home purchase was the primary factor dragging down the market in 2018. Remortgage loan activity, however, has remained stable and was again the best performing segment.

Brexit-related uncertainty has depressed near-term prospects for the mortgage market, however, the situation looks much more favourable over the medium to long-term. Despite the chaos of the current political and economic climate, Mintel’s research reveals that homeownership continues to be an ambition for a large slice of the UK population.

This Report explores the UK market for residential mortgages, detailing the size of the market, including a five-year forecast, distribution channels and the key factors affecting the mortgage market. The Report reveals the key players, their share of the market and recent activity. Mintel’s exclusive consumer research examines the types of mortgages homeowners hold, when fixed-term deals are due to expire, concern about the impact of rising interest rates, general mortgage behaviour, and any plans for the next 12 months. Finally, the Report investigates the attitudes and behaviour toward home ownership among those currently renting or living in a family home.

Products covered in this report

This Report includes discussion of residential mortgages used for the following reasons:

  • House purchase: the loan is used to purchase a property.

  • Remortgage: where a mortgage borrower redeems his/her existing mortgage with their current lender and takes out a new mortgage on the same property.

  • Further advance: a form of additional borrowing offered by lenders to their existing mortgage customers for the purposes of home improvements or to buy a car etc. By taking out a further advance, a borrower is increasing their overall mortgage debt with the lender.

For the purposes of this Report, Mintel has used the following definitions of mortgage interest rates:

  • Fixed rate: the interest payments are fixed for a set period of time, after which the borrower will be moved on to another rate, such as the lender’s standard variable rate.

  • Standard variable rate (SVR): the interest varies with the lender’s mortgage rate.

  • Tracker rate: the interest rate moves up or down by tracking an external rate, such as the Bank of England base rate or LIBOR (London Interbank Offered Rate).

  • Discounted rate: the interest rate varies with the lender’s SVR, but the rate is also discounted for a set period of time.

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