Appetite for remortgaging expected to grow: Bank of England

Demand for remortgage finance increased significantly over the past three months and lenders expect this trend to continue in the next quarter, according to the Bank of England’s quarterly credit conditions survey.

However, many borrowers might find it harder to find a home loan as the survey also found that mortgage availability to households fell in the three months to the end of August (Q3), and is expected to edge down again between now and the end of November.

The Bank of England’s credit conditions survey is conducted every quarter and asks banks and building societies about the past three months and the coming three months.

Lenders reported demand for mortgages from homebuyers was unchanged in the previous three months, and was expected to remain no different in the coming three months.

Overall spreads on secured lending to households — relative to bank rate or the appropriate swap rate — were reported to have narrowed slightly in 2018 Q3 and were expected to narrow significantly in Q4. Within this, spreads on buy to let lending were reported to have narrowed significantly and spreads on prime lending were unchanged in Q3.

The most recent findings come as Britain has less than six months to go until it leaves the European Union. Overall, the survey suggests a subdued outlook for Britain’s housing market, and was released on the same day the Royal Institution of Chartered Surveyors said Brexit was causing the property market to stagnate.

Cashback Remortgages founder Suchit Sethi says: “It is no surprise that savvy homeowners have been trying to lock in the best possible rate, by remortgaging in their droves, amid the crescendo of economic uncertainty linked to Brexit. It’s hard to predict what will happen to the cost of borrowing, so many are prepared to accept a modest early repayment fee, in exchange for the security that a new rate brings.

“There’s no guarantee that the current low rates we’re seeing will stick around, especially with remortgaging levels forecast to continue to rise in the next few months. Lenders will also be hedging their bets ahead of Brexit, so homeowners might be wise to consider acting sooner rather than later.”

Recommended

Green-House

Bank of England moots tighter environmental regulation for homeowners

A report on climate change issued by the Bank of England’s Prudential Regulation Authority has hinted that tighter environmental regulations may be on the way for landlords and owner occupiers. As covered by Lucy Barrett in Mortgage Strategy, from 1 April new Minimum Energy Efficiency Standards came into force, stating that landlords can only rent […]

Bank-of-England-Building-BoE-Bus-700x450.jpg

Bank of England holds base rate at 0.75%

The nine members of the Monetary Policy Committee have voted unanimously to maintain the base rate at 0.75 per cent. The meeting minutes reveal that the committee believes that, “there have been indications, most prominently in financial markets, of greater uncertainty about future developments in the [EU] withdrawal process,” before adding that, “any future increases […]

Newsletter

News and expert analysis straight to your inbox

Sign up