Gross mortgage lending for the total residential market in July was £24.6 billion, some 7.6% higher than a year ago, but approvals by the main high street banks in July fell by 0.8%, the latest figures shows.
Within this, remortgaging approvals were 2.8% higher than for the same period a year earlier. There was a fall in house purchase and other secured borrowing of 0.6% and 11.7% respectively, according to the data published by UK Finance which represents the majority of lenders.
The rise was driven by homes owners looking for attractive remortgage deals ahead of the expected Bank of England interest rate rise, according to Peter Tyler, director at UK Finance.
Those working in the industry agreed. ‘The surge in demand was driven by the anticipated rate rise, with many people remortgaging to fix a good deal. More than 3.5 million residential mortgages are on a variable or tracker rate, and the consequences of the interest rate rise for consumers are yet to be seen,’ said John Goodall, chief executive officer of buy to let specialist Landbay.
‘However, the long term rate over the next five years is not expected be much higher than it is today so I don’t expect to see considerable impact on pricing,’ he added.
Jeff Knight, marketing director for Foundation Home Loans, explained that this has been the case in the buy to let lending market as landlords choose to maintain the size of their portfolios, waiting for a more opportune time to build on it.
‘Growth also can be attributed to the burgeoning specialist sectors within both residential and buy to let. Lenders that can cater to those borrowers who don’t fall within the standard category. It’s this recognition of the need to be flexible with funding that will ultimately keep the market moving forward,’ he said.
