Remortgaging grows alongside house purchase lending
Published: 5 November 2013 | Author: Bernard Clarke
Gross mortgage lending increased to £49.3 billion in the third quarter – almost one-third (32%) higher than in the same period last year, our data showed. The amount advanced to borrowers in the third quarter was also almost 18% higher than in the preceding three months.
Our recent market commentary attributed some of this growth to "the strongest house purchase performance in five years." But recent data from the Bank of England indicated that remortgaging was also increasing.
Despite the recent increase in activity, house purchase approvals are still running at only half their peak level. But we expect the market to continue to show signs of recovery in the coming months.
What may not be clear for a while, however, is the effect on the market of the mortgage guarantee element of the Help to Buy scheme.
The scheme becomes fully operational in January but with firms also preparing to implement the final rules emerging from the mortgage market review a few weeks later – in April – it may be several months into the year before we are able to gauge the impact of Help to Buy.
What we can say for now is that the scheme will come into full effect with the housing market already showing signs of recovery, with improved credit availability, increased competition in the mortgage market and strengthening demand from consumers.