UK Finance: Mortgage and remortgage approvals on the rise

Ryan Fowler

March 26, 2018

Mortgage approvals rose for the first time in four months in January as some 40,117 mortgage loans rubber stamped, according to the latest figures from UK Finance. 

That’s up from 36,085 in December but is still down on January 2017, when 44,259 mortgages were approved by lenders.

Gross mortgage lending itself was estimated to stand at £19bn by the trade body.

Meanwhile, remortgage approvals rose 9% in both number and value terms year-on-year in February.

John Phillips, Just Mortgages and Spicerhaart group operations director, said: “The more significant news is that remortgage approvals are up more than 9%, both in terms of number and value compared to a year ago.

“This will most likely be because there is speculation of further rate rises, so borrowers are looking to lock in low rates now.

“It could also be to do with buy to let changes. Two years ago, the chancellor announced that, from April 2016, buy to let landlords and people buying second homes would have to start paying a 3% surcharge on each stamp duty band. In response, many of those that were going to be affected by the change quickly bought or remortgage before that it came into effect.

“Two years on, many of those who acted at that time will be coming to the end of their mortgage deals which could also explain some of the rise in remortgages. I think we will also see more activity in buy to let sector borrowing in the next week or so, because from April 1, the amount landlords can offset when calculating their tax bill drops from 75% to 50%.”

The Bank of England is set to issue its data on the finance market later this week.

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