The mortgage market experienced a strong April, according to the latest figures from UK Finance, with approvals and total lending up year-on-year.
A gross of £20.4bn in lending was completed in April the trade body said, a rise of 13.3 per cent from the same month a year earlier.
Approvals, meanwhile, were up 11 per cent in the period.
UK Finance found the rise was primarily driven by remortgage approvals, which were almost 30 per cent higher than a year earlier.
This is in contrast with figures for March when remortgaging was found to have softened on a year-on-year basis.
The body’s managing director Eric Leenders says: “April saw steady growth in mortgage lending and approvals, following a slowdown in activity the previous month. This was driven by strong remortgaging levels, as borrowers locked into attractive deals amid expectations of a base rate rise.”
IRESS principle mortgage consultant Henry Woodcock says: “An increase in gross mortgage lending appeared likely as the April RICS survey showed new buyer enquiries and agreed sales stabilising. Even though the sale of £1m-plus houses increased to a record high in England and Wales last year, some challenges remain in the mid and upper tiers of the market and in particular, falling house prices in London.
“There is still no clear consensus when the Bank of England might increase the base rate. However, following the ending of its Term Funding Scheme in February, lenders are going to need to find other sources of funding. Many industry commentators have said lenders will be forced to increase mortgage rates as the ‘cheap’ money provided by the scheme runs out. And there’s some evidence this is happening already.
“I expect this trend of slowly increasing lender rates will continue over the Summer months. I also predict there will be a rebalancing of the market as buy-to-let activity diminishes further still, following stamp duty increases and tapering of tax relief for landlords.”