Remortgage levels jump to nine-year high in October

The number of remortgage approvals being made jumped to a nine-year high just before the Bank of England base rate was hiked in November, figures show.

Wednesday, 29th November 2017, 5:54 pm
Updated Tuesday, 12th December 2017, 12:40 am
The figures also show that mortgage approvals fell to a 13-month low

Some 51,593 remortgage approvals were recorded by the Bank of England in October - the highest figure since October 2008.

On November 2, in a move that was widely anticipated, the Bank of England base rate was raised from 0.25% to 0.5%, meaning some variable rate mortgage holders faced the prospect of higher costs.

Many home owners may have been looking to remortgage to a cheaper deal in the weeks leading up to the base rate hike.

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The Bank’s figures also show that the number of mortgages being approved for house purchase fell to a 13-month low of 64,575 in October.

And the report showed a further cooldown in the annual growth in consumer credit - to its lowest levels in a year and a half.

Consumer credit, which includes borrowing using credit cards, personal loans and overdrafts, showed annual growth of 9.6% in October, edging down from 9.8% in September and 10% in August.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Mortgage rates continue to be competitive despite the base rate rise earlier this month.”

Howard Archer, chief economic adviser at EY ITEM Club, said: “It remains to be seen whether the Bank of England’s interest rate hike on November 2 will have a marked dampening impact on consumer borrowing.

“While the increase was just 25 basis points and interest rates are still at historically very low levels, a number of consumers could be vulnerable given high borrowing levels.

“There may also be a psychological impact on potential borrowers given that it was the first interest rate hike since 2007.”

He continued: “The Bank of England will be pleased with the slowdown in consumer credit in October and will be looking for a continuation of this trend...

“There are clear signs that lenders are markedly reining in the amount of unsecured credit available to consumers and also tightening their lending standards.”