Remortgage approvals continued to rise in December, hitting a new eight-year high of 47,721.
The latest stats from the Bank of England have shown that approvals for remortgages continued to grow in December and reached a new 'post-crisis- high of 47,721 - beating November's 45,683 approvals, which was the highest total since October 2008.
According to the report, approvals remained in line with recent months for house purchase - 67,898. Total lending secured on dwellings rose by £3.8bn in December, the highest flow since March 2016.
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented: “The Bank of England’s figures clearly show a strong end to the year for the mortgage market. It is particularly encouraging to see so many savvy borrowers taking the initiative and saving themselves a potentially significant sum of money by swapping their existing mortgage deal."
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "The level of mortgage lending for December was encouraging and helped make 2016 a surprisingly good year for the market, particularly when one considers the significant headwinds created by the increase in stamp duty for landlords and second homeowners in April and the uncertainty surrounding the referendum.
Record low mortgage rates are responsible for the resilience we have seen, with many borrowers remortgaging to take advantage of the lowest rates ever. Meanwhile, first-time buyers have been able to take advantage of an increase in the number of high loan-to-value deals and despite fears that the end of the Help to Buy mortgage guarantee scheme would give them a massive setback, this doesn’t seem to be the case.
Moving into this year, Swap rates have settled down since the beginning of January and several lenders have announced competitive deals on the back of these. HSBC, Barclays and Aldermore have all launched cheaper rates in the past few days and an appetite to do business among lenders shows no signs of abating. This is particularly good news for those borrowers who require a straightforward ‘vanilla' mortgage but we would like to see more tweaking of criteria and innovation to make it easier for other groups such as older borrowers and the self-employed to access mortgage finance rather than just cheaper rates."
Jonathan Sealey, CEO at Hope Capital, said: “Remortgaging continues to carry the rest of the market. There is no doubt that consumers are making the most of the continued low interest environment before Article 50 is triggered and we move into another uncertain economic world. However, home movers numbers remain low, which is a cause for concern for the future health of the market. Until this changes we will have a lack of properties coming to market and we will be ever reliant on new property being built.”
John Phillips, group operations director at Just Mortgages and Spicerhaart, said: “Approvals of loans secured on dwellings for remortgaging was higher than the previous six month average, suggesting that the low rates are responsible for the resilience we’ve seen in recent months. This growth in the remortgage sector has enabled homeowners to make substantial savings to their monthly outgoings and it is good to see that more borrowers are taking the initiative and saving themselves money by swapping their current mortgage deal.
As we look ahead into 2017, it is likely that remortgaging will remain high as more borrowers will look to remortgage to secure favourable rates. Although the full impact of Brexit is still waiting to be felt in the mortgage market, rising inflation will inevitably apply additional pressure to household budgets. Therefore, any way to help reduce outgoings, such as remortgaging, will be welcome relief to many borrowers.
Swap rates have also settled down since the beginning of the year and, with gross mortgage lending at an eight year high, let’s hope borrowers continue to take advantage of the low rate environment, as it is possible that confidence will fluctuate in March if Article 50 is declared, as expected.”