BBA: purchase and remortgage approvals up
This is according to the latest BBA high street banking figures which also show higher capital repayment (including homeowners moving between lenders) continues to generate the contractions in borrowing stocks seen over the past year and explains the subdued picture of net borrowing.
The numbers of approvals for house purchase and remortgaging both rose in September, with house purchase the highest since December 2009 and remortgaging the highest since October 2011.
Approvals in September for borrowing other than house purchase or remortgaging are in line with those seen during rest of the year.
BBA statistics director, David Dooks said: “September’s figures build on the growing picture of improved consumer confidence, with stronger gross mortgage lending, rising house purchase approvals and increased consumer credit.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Consumer confidence continues to improve, with demand for housing strengthening.
“Some buyers are worried about being priced out of the market further, while others are finally convinced that they will be able to get hold of mortgage finance at excellent rates so it’s as good a time as any to take the plunge.
“While money market rates edge up slowly, a number of lenders have reduced their mortgage pricing to attract business and meet year-end targets. We expect this to continue, with some cracking deals available to buyers and those remortgaging over the next couple of months.
“It is also encouraging that there remains a strong trend for borrowers to overpay on their mortgages, taking advantage of low interest rates and paying down debt where they can.”
Lea Karasavvas, managing director of Prolific Mortgage Finance, said: “In September and October the mortgage market has been absolutely booming.
“Activity-wise, the last time the market was like this was 2006.
“The Funding for Lending Scheme was the trigger and, coupled with the recovering economy, has seen lenders relax their criteria, compete on product and commit to larger loan volumes.
“The autumn is usually a busy time in the property market but this year it is astronomically busy.
“With rates for first time buyers below 4% and two year fixed rates now half of what you’re paying on a variable rate, it’s no surprise there is more activity.
“People are making the house move they’ve wanted to make for years and are remortgaging onto what they sense to be once-in-a-lifetime mortgage rates.
“It’s not just London that is seeing a sharp rise in activity. House purchases and remortgages are improving all around the country.
“Clearly there’s a worry that the property market is starting to overheat. In the case of the capital, it’s certainly hot but in the rest of the country there’s a long way to go yet.
“With supply an issue in London, there is, to some extent, a glass floor under prices.”