According to the BBA's latest figures, after seeing slower demand in the second half of 2014, the overall mortgage stock is now 1.2% higher than a year ago.
Richard Woolhouse, Chief Economist at the BBA, said:
“These figures show that thousands of us managed to tear ourselves away from the Ashes series to remortgage during July.
“This was a 29% surge on 12 months before and the highest figure we’ve seen for four years. Savvy homeowners are snapping up competitive deals before an expected increase in interest rates.
“There were concerns that new regulations had made applying for a mortgage more onerous. But remortgaging is still a straightforward process that can take even less time than Alastair Cook and his men took to beat Australia.”
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented:
“Remortgage approvals hit their highest level in four years in July, as the prospect of an interest rate rise prompted many homeowners into action. China’s financial crisis may have now thrown doubt over when we can expect a base rate rise, but homeowners still stand to save significant amounts by switching to one of the record low rates available on the market. This is particularly true of those borrowers currently languishing on their lender’s standard variable rate.
“Several lenders did increase their pricing in July, so if borrowers are in a position to make a long-term commitment, a fixed rate can protect against future rises. It’s unlikely that today’s rates are going to be around for much longer: locking in now will extend the life of record low rates and maintain savings for as long as possible.
“Our recent analysis showed that the prospect of remortgaging was keeping many borrowers up at night, with the majority of remortgage searches taking place between 10pm and 6:59am. However, it is a process worth doing: delaying too long runs the risk of missing out significantly reduced mortgage bills. An independent mortgage broker can also help make the remortgage process faster and more efficient.”
Richard Sexton, director of e.surv chartered surveyors, added:
“A fear of rising interest rates isn’t the only factor that can push remortgaging levels upwards. A positive combination of wage growth, low inflation and healthy house price growth is contributing to a mix of economic good news which is supporting the remortgage sector. Many homeowners now have a much stronger financial footing. They are re-assessing their finances and switching to better rates while they can. At the moment, a wide array of record low deals remain, despite some initial withdrawals, and it is these that homeowners are tapping into.
“The wider house purchase market is also in good shape, although it remains a struggle for many first-time buyers to put together the deposit they need to get onto the property ladder. This will remain the case until wage growth fully catches up with house price growth, and in that respect there is still a long way to go. In the meantime, financial support schemes like Help to Buy remain important tools to maintain healthy momentum at the bottom of the market.”
