24th February 2016
Mortgage lending by banks reached hit £13.6bn last month, the highest since 2008 and up 38% year-on-year, new figures show.
The number of approvals in January was 80,285, up 33% on the same month of 2015, according to British Bankers’ Association data, which covers six large banking groups.
House purchase approvals made up 47,509 of the figure, up 27% on January 2015.
Remortgaging approvals were 25,040, an increase of 42% on the first month of 2015.
The remaining 7,736 were further advances secured against homes.
BBA chief economist Richard Woolhouse says: “The start of the year has seen a significant rise in mortgage borrowing.
“It seems that this has been driven, in part, by borrowers looking to get ahead of the increases in Stamp Duty for buy-to-let and second home buyers scheduled to come into effect in April.”
Charlotte Nelson, finance expert at Moneyfacts.co.uk, says: “The rise has been greatly helped by intense competition in the mortgage market, with every loan-to-value (LTV) and fixed rate being fought over by lenders wanting to gain pole position. As a result, the average two-year fixed mortgage rate, for instance, has dropped from 3.14% to 2.56% in the space of just one year.
“Buy-to-let lending has been similarly impacted, with the average two-year fixed rate for buy-to-let mortgages falling from 3.50% to 3.33% as lenders compete for landlords’ attention before the stamp duty changes take place in April.
“In just one year the mortgage market has significantly changed thanks to providers’ determination to capture borrower interest. But these record low deals can only last so long, so those opting for a low deal now are likely to be making a wise decision.”