According to recent research, mortgage approvals during December 2016 reached an 8-year peak of 47,721, the highest monthly figure since October 2008.
The Bank of England statistics also indicated that total lending for properties reached £20 billion during the final month of 2016, the greatest level since March’s sum of £27 billion.
Industry commentators have attributed the growth in remortgaging during 2016’s final quarter to the record low interest rates.
A monthly average of 45,900 remortgages took place in Q4 of 2016, a significantly higher figure than the avergae of 41,800 witnessed in the first nine months of the year.
The Director of Legal & General Mortgage Club, Jeremy Duncombe stated that the statistics indicated “a strong end to the year for the mortgage market” as well as mentioning that it was “encouraging to see so many savvy borrowers taking the initiative” by swapping their existing mortgage.
Jonathan Sealey, CEO at Hope Capital also shared his thoughts on the data, stating that “remortgaging continues to carry the rest of the market”. He also highlighted that consumers were likely to be taking advantage of the lower rates prior to the triggering of Article 50.
“There is no doubt that consumers are making the most of the continued low interest environment before Article 50 is triggered and we move into another uncertain economic world. However, home movers numbers remain low, which is a cause for concern for the future health of the market. Until this changes we will have a lack of properties coming to market and we will be ever reliant on new property being built.”
Also commenting on December’s figures was Mark Harris. The chief executive of mortgage broker SPF Private Clients described the trends as “encouraging” as well as highlighting the market’s stability despite stamp duty changes and the referendum induced uncertainty.
“The level of mortgage lending for December was encouraging and helped make 2016 a surprisingly good year for the market, particularly when one considers the significant headwinds created by the increase in stamp duty for landlords and second homeowners in April and the uncertainty surrounding the referendum.
“Record low mortgage rates are responsible for the resilience we have seen, with many borrowers remortgaging to take advantage of the lowest rates ever. Meanwhile, first-time buyers have been able to take advantage of an increase in the number of high loan-to-value deals and despite fears that the end of the Help to Buy mortgage guarantee scheme would give them a massive setback, this doesn’t seem to be the case.
He went on to mention prospects for the year ahead, as well as highlighting the need for mortgage criteria to be more tailored for certain groups.
“Moving into this year, Swap rates have settled down since the beginning of January and several lenders have announced competitive deals on the back of these. HSBC, Barclays and Aldermore have all launched cheaper rates in the past few days and an appetite to do business among lenders shows no signs of abating. This is particularly good news for those borrowers who require a straightforward ‘vanilla’ mortgage but we would like to see more tweaking of criteria and innovation to make it easier for other groups such as older borrowers and the self-employed to access mortgage finance rather than just cheaper rates.”