The UK housing market “is beginning to hot up again” as mortgage approvals have risen by 8% since the start of last year, a banking body has announced. Figures released by a group of lenders show that more than 5,000 more mortgage approvals were accepted during the first six months of this yea. The BBA (British Bankers’ Association) have said that these figures come as a sign that the housing market was “waking up” after such a quiet spring.
In June of this year the number of home loans approved hit a 15-month high, according to figures from a large number of high street banks. The data is adjusted to take into account a fall in activity in the market a year ago when the mortgage rules changed. These changes slowed progress and limited the number of mortgages that could be approved significantly. The amount of gross lending rose to £11.5bn, this rise in mortgages activity comes as banks and building societies are fiercely competing for borrowers’ custom.
Charlotte Nelson of financial information service MoneyFacts had this to say:
“This rise is partly fuelled by record-low mortgage deals. The average two-year fixed rate mortgage has fallen from 3.67% a year ago to 2.75% today, and borrowers are clearly taking advantage of these low rates to secure lower monthly repayments, however, with Mark Carney’s announcement that base rate is likely to rise in the near future, these low rates will not be around for long.”
In the last few weeks the Bank of England Governor, Mark Carney has said that with all of this lending, interest rates could rise before the year is through. Remortgaging has rise by more than 20% in the last year, according to figures the BBA released, and the general view of a rise in interest rates is also thought to be the reason a large number of homeowners are now remortgaging.