Gross mortgage lending rose by 7.6% to £24.6bn in July 2018 year-on-year ahead of August’s base rate rise, UK Finance figures show.
Mortgage approvals by the main high street banks fell by 0.8% year-on-year, though remortgage approvals rose by 2.8%.
Peter Tyler, director at UK Finance, said: “July saw steady growth in gross mortgage lending, driven largely by remortgaging as homeowners locked into attractive deals in anticipation of the recent base rate rise.”
Jeff Knight (pictured), marketing director for Foundation Home Loans, agreed that the rate rise was behind the increase.
He said: “The anticipation of a rate rise certainly would have encouraged a spike in activity, and while the purchase market is still less inflated – particularly for first-time buyers – it’s remortaging activity that is helping to maintain momentum and overall growth.
“This is certainly the case in buy-to-let as landlords choose to maintain the size of their portfolios, waiting for a more opportune time to build on it.”
Some expect the remortgage market to continue its strong activity in the coming months.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lenders remain keen to lend and offer competitive products, particularly in the remortgage space.
“With other incentives such as cash back increasingly being offered to those remortgaging, combined with fears of further potential rate rises, we expect this area of the market to remain particularly strong in coming months.”
However some disagree.
Richard Pike, sales and marketing director at Phoebus Software, said: “The market has been propped up recently by the continuous buoyancy in remortgaging but, with few people now left on variable or tracker rates, this too is likely to slow.
“As we approach the deadline for Brexit even the threat of a no deal is likely to weigh heavy across our economy, how that will manifest itself in the housing market is difficult to predict, but it could bring along a period of stagnancy while people wait to see what happens.”