Mortgage lending rose to a seven-year high during August, as buyers and remortgagers came back into the market.
According to data from the British Bankers’ Association, a total of £12.2bn was advanced during the month. This was the highest since August 2008.
Highs
Net lending also reached a five-year high of £1.96bn, but mortgage advances have had a slow start to the year, staying around the £500m per month mark.
However, advances did begin to rise in May, after the uncertainty surrounding the General Election was dispelled. Indeed, the market looks strong moving forwards, with total number of mortgages approved increasing across all categories.
The number of loans for people looking to remortgage rose to 25,540 in August, which was the highest level for four years. What’s more, this was 38% above the figure for the same period of 2014. This surge was attributed to people taking out fixed rate mortgage deals in order to maintain control over their monthly repayments, once the Bank Rate does eventually rise.[1]
Mortgage approvals for house purchases only rose, by 16% in comparison to August 2014 to stand at 46,743, the highest level since February last year.
Lack of supply
RICS feels that the number of homes on the market stayed at an all-time low during August, with the ongoing shortage of stock stalling the recovery in transaction volumes.
‘People are putting their money into bricks and mortar while interest rates are low and the timing of a likely rate rise remains uncertain,’ said Richard Woolhouse, chief economist at the British Bankers’ Association.[1]
Woolhouse believes that, ‘mortgage borrowing continues to pick up,’ and. ‘the August increase is the largest in five years, although borrowing is still some way below pre-crisis levels. Remortgaging numbers also continue to be strong, as shrewd homeowners snap up competitive deals.’[1]
[1] http://www.zoopla.co.uk/discover/property-news/mortgage-lending-takes-off-after-general-election-24-09-15/?utm_content=bufferce5d9&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#Ovgsfv1kgv4DfSK8.97