BBA reports "significant rise" in mortgage borrowing

January saw gross mortgage borrowing of £13.6 billion - 38% higher than a year ago and the highest since mid-2008, according to the latest BBA stats.

Related topics:  Mortgages
Rozi Jones
24th February 2016
house growth graph this is actually the green one

The number of mortgage approvals rose 33% annually, with remortgaging up 42% and house purchase up 27%.

Richard Woolhouse, Chief Economist at the BBA, said:

“The start of the year has seen a significant rise in mortgage borrowing. It seems that this has been driven, in part, by borrowers looking to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect in April."

Adrian Whittaker, Sales Director at New Street Mortgages, commented:
 
“It is good to see such a significant year-on-year rise in lending as more people look to invest in a property. However, with rising competition for a limited supply of housing borrowers and brokers need to be certain of a lender that can process a mortgage as swiftly as possible.
 
“It is crucial that as an industry we support brokers in this race, updating our propositions with the latest technology and digitising documents to give intermediaries the surety and speed they want when it comes to finding their client the right mortgage."

Rob Weaver of property crowdfunding platform, Property Partner, added:
 
"The sharp spike in mortgage borrowing in January was almost certainly a result of the stampede to beat the buy-to-let stamp duty deadline. But in the mad rush to beat the April deadline, are borrowers fully aware of how the government’s tax changes will impact their profits further down the line?
 
"In a recent survey of landlords, we found that a startling 27% had little or no awareness of the radical changes coming. The phased withdrawal of mortgage interest tax relief could be a sting in the tail for many buy-to-let investors. Factor in interest rates rising, even by a small amount, and buy-to-let profitability could be decimated as mortgage interest relief is phased out.
 
"Anyone investing in traditional buy-to-let at the current time needs to be going in eyes wide open and with complete knowledge of how the forthcoming tax changes will impact their portfolio in the short to medium term."

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