Remortgage levels soared by a third in
June as homeowners looked to lock into low interest rates before
borrowing costs start to rise, figures showed today.
The number of approvals for people remortgaging jumped to 23,985 during the month, the highest level since August 2011 and up from 18,137 in June last year, according to the British Bankers’ Association (BBA).
There was also a 6 per cent rise in pipeline loans for people buying a property, with 44,488 mortgages approved for house purchase.
The BBA said some of the year-on-year gain was due to the slowdown in the mortgage market seen in June last year, as lenders adapted to the tougher new affordability criteria introduced under the Mortgage Market Review.
But it added that once the impact of the change in the rules had been factored in, total mortgage approvals were still 8 per cent higher than they had been in the same month of 2014.
There was also a 4 per cent month-on-month increase in the number of loans approved for house purchase, in a further sign that the property market is picking up steam following the General Election.
Richard Woolhouse, chief economist at the BBA, said: “The housing market is beginning to hot up again, as we’ve seen a pick-up in the number of mortgage approvals for the last month.
“Interestingly, we’ve also seen an increase in the number of people remortgaging, which could be down to savvy borrowers taking advantage of competitive deals on fixed rate mortgages ahead of a possible rise in interest rates.”
The number of approvals for people remortgaging jumped to 23,985 during the month, the highest level since August 2011 and up from 18,137 in June last year, according to the British Bankers’ Association (BBA).
There was also a 6 per cent rise in pipeline loans for people buying a property, with 44,488 mortgages approved for house purchase.
The BBA said some of the year-on-year gain was due to the slowdown in the mortgage market seen in June last year, as lenders adapted to the tougher new affordability criteria introduced under the Mortgage Market Review.
But it added that once the impact of the change in the rules had been factored in, total mortgage approvals were still 8 per cent higher than they had been in the same month of 2014.
There was also a 4 per cent month-on-month increase in the number of loans approved for house purchase, in a further sign that the property market is picking up steam following the General Election.
Richard Woolhouse, chief economist at the BBA, said: “The housing market is beginning to hot up again, as we’ve seen a pick-up in the number of mortgage approvals for the last month.
“Interestingly, we’ve also seen an increase in the number of people remortgaging, which could be down to savvy borrowers taking advantage of competitive deals on fixed rate mortgages ahead of a possible rise in interest rates.”
Today’s figures predate a recent speech by Bank of England governor Mark Carney, in which he warned the official cost of borrowing could start to increase at the turn of the year.
He also suggested that over the medium term, the Bank Rate was likely to rise to around 2.25 per cent.
Total mortgage advances reached £11.6bn in June, up on both £10.7bn in May and the £10.2bn lent in June last year, the BBA figures showed.
Net lending, which strips out repayments and people switching to a new deal, reached £1.2bn, unchanged from May but significantly higher than the £811m seen in June last year.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The latest statistics from the BBA showing that mortgage approvals are on the rise is great news for the market and borrowers alike.
“This rise is partly fuelled by record-low mortgage deals: the average two-year fixed rate mortgage has fallen from 3.67 per cent a year ago to 2.75 per cent today, and borrowers are clearly taking advantage of these low rates to secure lower monthly repayments.
He also suggested that over the medium term, the Bank Rate was likely to rise to around 2.25 per cent.
Total mortgage advances reached £11.6bn in June, up on both £10.7bn in May and the £10.2bn lent in June last year, the BBA figures showed.
Net lending, which strips out repayments and people switching to a new deal, reached £1.2bn, unchanged from May but significantly higher than the £811m seen in June last year.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The latest statistics from the BBA showing that mortgage approvals are on the rise is great news for the market and borrowers alike.
“This rise is partly fuelled by record-low mortgage deals: the average two-year fixed rate mortgage has fallen from 3.67 per cent a year ago to 2.75 per cent today, and borrowers are clearly taking advantage of these low rates to secure lower monthly repayments.
“However, with Mark Carney’s announcement that Bank Rate
is likely to rise in the near future, these low rates will not be
around for long.”
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