Statistics released by the Bank of England today show that mortgage lending activity increased in Q2, with new commitments at their highest level since Q1 2008.
Specifically, total gross advance grew by 6.9 per cent quarterly, from £62.4bn to £66.7bn, and new commitments increased by 19.8 per cent, from £61.1bn to £73.2bn.
The figures also show that remortgaging as a proportion of new lending fell by 2.0 per cent on a quarterly basis, accounting for 30.8 per cent of new lending in Q2.
Meanwhile, the proportion of first-time buyers grew in the quarter, from 19.6 per cent to 21.4 per cent, and the share of Buy to Let loans declined to 13.1 per cent of the market.
The Bank of England data also shows that there has been an increase in the proportion of higher LTV loans on a quarterly basis, although it is lower annually. “This can be linked,” the report says, “to the rise in new house purchases, with a lower proportion of remortgages.”
On this, Dashly.com founder Ross Boyd comments: “Brexit pessimism faded over the summer as borrowers shrugged off any uncertainty with a resurgent risk appetite.
The proportion of higher LTV mortgages fell in the first quarter of the year but rose once more in the second as buyers turned their back on doom-mongering doubts over how the UK’s departure from the EU will play out.”
Cashback Remortgages founder Suchit Sethi says: “These official figures paint a mixed message for the state of the housing market. The fact that there was an increase in overall mortgage lending suggests those looking to move had a sense, correctly, that interest rates were on the verge being raised.
“However, the figures show remortgaging was down… indicating that, sadly, many homeowners were effectively blindsided by August’s rate rise. Lenders have been passing this rise on which means that, for many, the boat has been missed and repayments will rise when they finally get around to remortgaging.”