New figures from the Bank of England have revealed a strong end to the year for the UK mortgage market, despite the increase in stamp duty and uncertainty surrounding the referendum.
The Bank’s Money and Credit report showed that mortgage approvals for house purchases edged up to 67,898 in December – a nine-month high.
This figure is up 10.7% from August’s low of 61,335, but still 7.1% below the January 2016 peak level of 73,091.
Net mortgage lending went up by £3.8 billion in December, slightly up on the £3.2 billion average of the previous six months.
Homeowners continue to take advantage of record low rates by remortgaging.
A total of 47,721 loans for remortgage were approved, up from 46,079 the previous month. This took the total value of remortgaging for the month up to £8.2 billion, well above the previous six-month average of £7.5 billion.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “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.”
