Mortgage approvals up in November
Mortgage approvals were up in November, driven by a rise in remortgaging approvals to 53,922.
The Bank of England Money and Credit data for November 2017 showed remortgageas rose from 51,956 in October, with a value of £9.3bn to 53,922 in November with a value of £9.5bn.
John Phillips, Just Mortgages and Spicerhaart group operations director, said: “It is no surprise that the value and number of remortages was up in November. The industry was expecting a boom as so many fixed rate deals came to an end.
“However, the number of interest only mortgages that also came to fruition must have been a factor as those borrowers, that had no exit plan, found themselves needing to remortgage.
“There are many more that will be in the same situation in the coming months and I expect that remortgaging will continue to be the element that keeps mortgage lending figures up, even though we are heading into a traditionally buoyant time for house purchase.”
Secured net lending remained stable in November at £3.5bn, broadly in line with the average seen since 2016.
Despite house purchases rising from 64,887 in October to 65,139 in November, the value remained of 11.9m.
Richard Pike, Phoebus Software sales and marketing director, said: “November was certainly a busy month, especially for remortgages. This will continue to be a factor as we head into what the FCA describes as one of the ‘peak periods for interest only mortgages to mature.
“It is unlikely that all those on interest only will be able to pay off their mortgages in full. Many will be heading into retirement, so it will be interesting to see how lenders react when approached by borrowers in the older age bracket looking for longer term funding.
“There could be a real shift in attitude over the next six to twelve months as the landscape changes.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said that this rise in remortgages was due to a fear of a potential interest rate rise.
He said: “The Bank of England data shows once again that you write this property market off at your peril. There is no sign of collapse in activity, despite the interest rate rise which was happening around this time.
“Of course, some caution must be taken as the gross figures include a large proportion of remortgaging as borrowers sought to protect themselves from further rate increases.
“Looking forward, we anticipate a fairly steady market in early 2018 and no great changes one way or another, with realistic vendors much more likely to do deals rather than those who are still holding out for unrealistic prices.”
Lending to non-financial businesses weakened towards the end of the year. The annual growth rate for all types of business fell to 1.7% in November.