New borrowing rose by 6% overall in 2015 compared to the previous year
The number of mortgage approvals in December was also up 24% higher on the previous year, with remortgaging up 31% and house purchase up 19%.
Richard Woolhouse, Chief Economist at the BBA, said:
“Last year was a strong year for household borrowing. There was a 6% rise in mortgage borrowing compared to 2014 and consumer credit expanded at more than 5% annually within an overall unsecured market which is growing at nearly 10% annually."
Adrian Whittaker, Sales Director, New Street Mortgages, commented:
“These figures from the BBA show mortgage lending is significantly up year-on-year as rising demand in the housing market moves lending into a ‘new-normal’. In this new, more competitive environment, it is crucial that the mortgage application process does not create a bottleneck for customers in the race to buy property."
Mark Harris, chief executive of mortgage broker SPF Private Clients, said:
"Cheap mortgage rates have certainly helped fuel the growth in lending in the market seen throughout 2015. Challenger banks keen to lend have helped push rates down to record lows and with interest rates unlikely to rise anytime soon, these low rates are expected to continue. However, we have probably seen the back of the very cheapest deals.
"Remortgaging numbers moderated in December and are unlikely to surge in coming months as comments from the Bank of England suggest that a rate rise is off the agenda at least for now. Often it is only once rates start rising that homeowners feel an urge to remortgage, and often after two or three rate rises that they actually get round to it."
Adrian Anderson, director of mortgage broker Anderson Harris, added:
"Borrowers exude confidence, incomes are rising, and lenders are keen to lend but this is not a debt-fuelled boom. Mortgage approvals are improving but far from racing away while growth is more moderate and therefore more sustainable than in the past. For many borrowers, tougher affordability criteria is still a barrier to getting a mortgage or remortgaging."
