An increase in remortgages inspired a mortgage approval increase in November, research shows.
According to data from The Bank of England’s Money and Credit release, remortgages rose from 51,956 in October (with a value of £9.3bn) to 53,922 the following month (£9.5bn).
With so many fixed rate deals ending around this period, it’s little surprise that the industry has experienced a surge in remortgages.
It may also be the case that many of those nearing the end of their interest only deals also had to remortgage due to having no exit plan.
The expiration of thousands of interest only mortgages has been described as a ‘ticking time bomb’ by mortgage journalists, and with many interest only mortgage holders heading into retirement, this could certainly put a strain on their finances.
Unable to pay off their property’s capital in full, it’s likely that many people are turning to remortgaging their home and taking out a new loan.
Last year’s interest rate rise might also be partially responsible for the sudden increase in remortgages.
Talking about the property market’s strength, estate agent Jeremy Leaf says: “There is no sign of collapse in activity, despite the interest rate rise which was happening around this time.
“Of course, some caution must be taken as the gross figures include a large proportion of remortgaging as borrowers sought to protect themselves from further rate increases.”
“Looking forward, we anticipate a fairly steady market in early 2018 and no great changes one way or another.”
