Remortgage lending hits highest level since 2009
Remortgage lending to home-owners has reached its strongest levels since 2009 as borrowers snap-up low-rate deals, according to banks and building societies.
Some £6.1 billion worth of remortgage loans were handed out to homeowners in October, marking the highest figure seen since January 2009, the Council of Mortgage Lenders (CML) said.
This was made up of 34,700 loans, up 10% month on month and a 5% increase compared with October last year.
The cut in the Bank of England base rate to 0.25% earlier this year has helped to push mortgage rates down further.
However, the number of mortgages being advanced in October to people buying a home was down compared with a year earlier.
First-time buyers borrowed £4.5bn in total in October, down by 8% on September and a 2% fall compared with October 2015.
Home-movers borrowed £5.9bn, down 9% on a month earlier and an 18% fall compared with a year earlier.
Meanwhile, landlords borrowed £900m for buy-to-let house-purchases in October - marking a 44% plunge compared with October 2015. The amount borrowed for this purpose was unchanged compared with September.
Paul Smee, director general of the CML, said buy-to-let house purchase lending remained “weak”, following a stamp duty increase for people buying second homes, which came into force on April 1.
Mr Smee said the lower buy-to-let lending figures were “likely to be the new normal”.
But he said of the relatively strong remortgage lending figures: “This appears to be linked to borrowers taking advantage of the re-pricing of mortgages following the base rate cut.”
Jeremy Duncombe, director of Legal and General Mortgage Club, said: “Remortgaging figures continue to rise annually as consumers take advantage of the record low fixed rates dominating the market.”
But he said the issue of housing supply is still a “huge factor in the housing market” and “the housing market remains burdened with spiralling property prices affecting affordability levels”.