Gross mortgage lending was up year-on-year while the number of mortgages from the high street banks and remortgage approvals were both down, UK Finance’s Household Finance Update for October 2018 has found.
Gross mortgage lending across the residential market in October was £25.5bn, 5.6% higher than last October.
The number of mortgages approved by the main high street banks in October was 4.1% lower year-on-year, although approvals for house purchase were 3.6% higher, remortgage approvals were 13.5% lower and approvals for other secured borrowing were 1.3% lower.
Eric Leenders, managing director, personal finance at UK Finance, said: “Overall mortgage lending grew in October, despite an uncertain economic environment, while house purchase mortgage approvals by the main high street banks were also up on the previous year.
“However remortgaging activity has softened, following a period of strong growth driven by fixed rate loans reaching maturity and anticipation of August’s base rate rise.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “It is encouraging news that mortgage approvals picked up in October compared with the same month last year, despite continuing uncertainty surrounding Brexit. Clearly those who need to get on with moving are doing so regardless.
“Remortgaging dropped away a little but that is no surprise given the surge in activity in this part of the market until now.
“Over the past six weeks, Swap rates have been trending downwards. The question is: will we see a lender fire sale as they target completions before year end as the cost of funding is cheaper?
“It could be a good time for borrowers to pick up an attractive mortgage deal as lenders compete more aggressively for business.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “When you drill down into these figures, the most important part is mortgage approvals for house purchase, which were 3.6% higher than this time last year.
“This may be a little better than many expected but confirms what we have seen on the ground – that some sellers are taking a reality check and recognising that the difference between sale price and purchase price is much more important than the headline figure.
“First-time buyers too are taking advantage of low mortgage rates, ample loan products and a slight easing of the affordability squeeze.
“Brexit appears to be more of a pre-occupation for buyers in the southeast than the rest of the country where affordability seems to be more relevant.”