Mixed news for mortgage approvals

Mixed news for mortgage approvals

The latest official figures from the Bank of England (BoE) have revealed mixed news for mortgage approvals across the UK.

The number of mortgages approved for house purchases fell to 64,575 in October – indicative of a shocking 13-month low. However, in that same month, remortgaging approvals jumped to a new high of 51,593 – the highest figure on record since the same month in 2008.

Overall net lending was £3.4 billion during October, the figures reveal.

Experts have suggested that homeowners rushed to remortgage their properties in order to take advantage of attractive fixed-rate deals ahead of a predicted interest rate increase, which was subsequently announced at the beginning of November.

In an historic move, the BoE increased its base rate from 0.25 to 0.5 per cent – a move which many feared would mean the end of ultra-low rate mortgages.

Despite these concerns, however, many commentators have so far been keen to point out that this is not necessarily the case.

Mark Harris, of mortgage lender SPF Private Clients, for example, said that deals “remained competitive” throughout November.

“As we head towards Christmas, the mortgage market continues its steady progress, which is very encouraging. Mortgage rates continue to be competitive despite the base rate rise… and with a further interest rate increase not likely anytime soon, we can’t see this situation changing.”

However, other commentators have voiced concerns that it may still be too early to tell exactly how the interest rate hike will affect the market.