Remortgage approvals rose in November
The number of loan approvals for house purchase (48,019) was slightly higher than the October figure (47,315). Approvals for remortgaging (34,262) rose from October (30,429) and were higher than the previous six-month average (28,210), while approvals for other purposes (22,770) fell from October (23,425) and were lower than the previous six-month average of 24,149.
Total lending to individuals rose £0.7 billion (0.0%) in November, while the twelve-month growth rate was unchanged at 0.8%.
Lending secured on dwellings rose £0.8 billion in November, compared to a £1.2 billion increase in October. This was slightly above the previous six-month average of £0.7 billion.
The twelve-month growth rate fell 0.1% to 0.8% and the three-month annualised growth rate fell 0.3% to 0.7%.
Commenting, Brian Murphy, head of lending at independent mortgage broker, Mortgage Advice Bureau, said: “The sharp increase in the number of remortgages shows that consumers are becoming far more wary of potential interest rate rises given the growing inflation threat. Increasingly, the belief is that Bank Rate will rise this year and not next.
“The remortgage spike also reflects the fact that there are currently some exceptional mortgage rates available at lower LTVs and people are cashing in while they can. Borrowers are aware that the clock is ticking on interest rates and do not want to be caught napping.
“Although mortgage approvals rose slightly on October, they are still very low by historical standards and are likely to fall back again in December for the usual seasonal reasons. January is also shaping up to be a flat month, as the VAT increase dampens enthusiasm for increased borrowing.
“Until consumer confidence increases and supply improves at higher LTVs, the mortgage market will remain stagnant. Overall, we expect an uneventful first quarter.”
Capital Economics said: “The Bank of England’s measure of mortgage approvals for house purchase rose for first time in seven months in November. However, mortgage lending remains incredibly low by historical standards. This will continue to weigh on house prices in 2011.”