Remortgage approvals jump 29% in a year
New data released today from the Bank of England shows that mortgage approvals for home buying were at an 18 month high in August, while remortgage approvals have risen by 29% over the past year.
The number of house purchase approvals rose to 71,030 in August, an increase of 8.2%, when compared to the average of 65,594 over the past six months.
The number of approvals for remortgaging was 40,931. This is 14.2% higher than the average of 35,811 recorded over the past six months.
Lending secured on dwellings also increased by £3.4bn in August, compared to the average monthly increase of £2.4bn over the last six months.
The three-month annualised and twelve-month growth rates were 2.9% and 2.1% respectively. Gross lending secured on dwellings was £19.1bn and repayments were £15.6bn.
David Whittaker, managing director of Mortgages for Business, said:
“Mortgage approvals as a whole are going from strength to strength. But beneath this surface current, there are also deeper and more complicated flows.
“There is an ongoing shift to different sorts of mortgage lending, and a booming remortgage market reflects that interest in new products. Even compared to extremely buoyant house purchase approvals, remortgaging has picked up more quickly – reflecting ongoing expectations of higher interest rates on the horizon, as well as a newfound love for the peace of mind of fixed rate deals.
“It isn’t boom times in every quarter though. Buy to let lending accounts for much of the trend to remortgaging specifically, and we are seeing strong interest from experienced landlords looking to take advantage of record low rates, even for fixed rate deals of five years or longer. But there is also a more muted tone to the buy to let industry now. Alongside an acceleration in overall mortgage lending, this could indicate a gradual correction in the proportion of mortgage lending to landlords.
“Buy to let lending accelerated through the first half of 2015 – to reach nearly 20% of gross lending. It should now be time for that proportion to drop back again. Fresh interest from the Government and Bank of England have not yet changed the fundamentals of the private rented sector – or the long-term business models of responsible and experienced landlords. But the real momentum may be turning back towards owner occupiers.”
The number of approvals for other purposes was 11,685, compared to the average of 10,477 over the previous six months.
Total lending to individuals increased by £4.3bn in August, compared to the average monthly increase of £3.5bn over the previous six months.
The three-month annualised and twelve-month growth rates were 3.5% and 2.7% respectively.
29th September 2015
