Remortgage approvals reached nine-year high in november

Borrowers seeking to protect themselves from rising interest rates
Borrowers seeking to protect themselves from rising interest rates

Remortgage loan approvals hit a nine-year high in November, just as borrowers were experiencing the first base rate rise in over a decade, Bank of England figures show.

Some 53,922 loans were approved, marking the highest figure since October 2008, the Bank’s Money and Credit report said.

The report also showed that consumers’ borrowing using credit cards, personal loans and overdrafts fell back to a near two-year low in the run-up to Christmas, prompting suggestions that rising interest rates may have had a “significant psychological impact” on some potential borrowers.

The number of mortgage approvals to home buyers also edged up month-on-month in November, to 65,139, from 64,887 in October - still slightly below the monthly average of 66,562 over the previous six months.

The Bank of England base rate was increased from 0.25% to 0.5% in early November - the first increase in more than 10 years.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (RICS), said the large number of remortgage loans in the latest figures suggests borrowers were seeking to protect themselves from further potential increases in interest rates.

Discussing the housing market generally, he said: “Looking forward, we anticipate a fairly steady market in early 2018 and no great changes one way or another, with realistic vendors much more likely to do deals rather than those who are still holding out for unrealistic prices.”

The annual growth rate of consumer credit - which includes borrowing using credit cards, personal loans and overdrafts - slowed to 9.1% in November, the lowest rate since December 2015.