Remortgage activity drove the market in October

Ryan Bembridge

November 29, 2017

The market was driven by strong remortgage activity in October as customers clamoured to secure a new deal ahead of the Bank of England base rate rise.

Seasonally adjusted figures from the Bank show there were 51,600 remortgage approvals in October, up from 48,100 in September.

Lea Karasavvas, managing director of Prolific Mortgage Finance, said: “You can almost smell the panic in the air.

Mortgage lending dipped last decade after 2007 crash

“Homeowners were literally falling over themselves to remortgage in October as the rhetoric from the Bank of England reached fever pitch.

“It’s a fine example of the wisdom of the crowd, as the public put pen to paper in greater numbers than at any time since the crash, and just in the nick of time.”

The Bank would go on to raise the base rate from 0.25% to 0.5% on 2 November.

John Phillips, Just Mortgages and Spicerhaart group operations director, said: “As a Bank of England rate rise became more realistic public perception increased and with it the need to ensure they had the best mortgage deal in place for the longer-term.

“Although there has been an increase in first-time-buyer activity, remortgage volumes are definitely a key component that is keeping the market at this level.”

House purchase approvals fell slightly from 66,100 in September to 64,600 in October.

Net lending secured on dwellings stood at £3.4bn in October, down from £3.8bn the month before.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘As we head towards Christmas, the mortgage market continues its steady progress, which is very encouraging.

“Mortgage rates continue to be competitive despite the base rate rise earlier this month, and with a further interest rate increase not likely anytime soon, we can’t see this situation changing.”

Most within the industry expect the stamp duty cut for first-time buyers purchasing properties worth up to £300,000 to stimulate activity.

Jeremy Duncombe, director of Legal & General Mortgage Club, said: “The Budget gave a welcome boost to first-time buyers with the stamp duty break.

“With Barclays following up with the reintroduction of 95% loan-to-value deals, there is plenty to entice them onto the ladder, assuming they can get a deposit together.”

 

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