"Although there has been an increase in first-time-buyer activity, remortgage volumes are definitely a key component that is keeping the market at this level."
Strong remortgaging levels ahead of the predicted Bank Rate rise meant the total number of mortgage approvals increased compared to the previous month, despite purchase approvals falling to a 14-month low of 64,575.
Net lending was broadly unchanged at £3.4 billion in October, which the Bank says was supported by growth in gross lending and repayments due to increases in remortgaging activity.
Jeremy Duncombe, Director of Legal & General Mortgage Club, commented: "These were the final set of figures before the Bank of England raised the base rate to 0.5%. Any spike in mortgage approvals could therefore be a result of borrowers rushing to lock in a fixed-rate deal before rates increased. It will therefore be interesting to see what next month’s figures show."
John Phillips, Just Mortgages and Spicerhaart group operations director, said: “As a Bank of England rate rise became more realistic public perception increased and with it the need to ensure they had the best mortgage deal in place for the longer term. Although there has been an increase in first-time-buyer activity, remortgage volumes are definitely a key component that is keeping the market at this level.
“The opportunities that remortgages will provide to brokers in the coming months cannot be overstated. The budget announcements might have been good for first-time-buyers, but supply is still a big problem. Although the government’s plans are admirable, we cannot build new houses overnight. Until more homes get into the supply chain there is little opportunity for many homeowners to move up that chain. Advisers will need a good back book, and contact strategy, if current levels are to be sustained.”
