December mortgage lending was 24% higher than a year ago both in terms of value and volume, the BBA’s High Street Banking Statistics have revealed.
December saw gross mortgage borrowing of £12.4bn, with approvals rising by 31% for remortgaging and 19% for house purchase.
Andy Knee, chief executive of Legal Marketing Services, expected a steady stream of remortgage activity in 2016.
He said: “The stage is set for existing homeowners to remortgage, taking advantage of higher house prices and continued low rates to reduce outgoings – particularly important after the Christmas period – or pay off other debts.
“Despite a slight decline in activity towards the end of the year, remortgaging approvals were up by almost a third year-on-year in December. We expect this to pick up in the New Year as families take stock of their finances to maintain a consistent stream of remortgaging throughout 2016.”
Eddie Goldsmith, chairman of the Conveyancing Association, said the January market has been very strong anecdotally but there are question marks over how the market will fare after the 3% buy-to-let stamp duty surcharge comes into force on 31 March.
He said: “Mortgage borrowing and approvals will continue to show an upwards trend certainly through the first quarter of 2016.
“However, what comes after this point is pure conjecture at present, given the tail-off in demand that may occur once the 3% extra stamp duty charge kicks in.
“Indeed, landlords are already having to make judgement calls about whether they will be able to complete their purchases before the deadline and, over the next few weeks, we may well see more landlords pulling out of purchases because of an inability to do this.
“This will clearly have an impact on mortgage approval numbers, borrowing levels and will also have a considerable knock-on effect to all those who were ‘sitting’ within those property chains.”