Remortgage lending surged in June as borrowers prepare for the first rise in base rate in over six years.
Figures from the Council of Mortgage Lenders, published last week, show remortgage lending was up 34 per cent year-on-year to £5.1bn. By volume, remortgage loans were also up annually, by 31 per cent to 31,600.
The amount lent to those buying a home was up just 3.9 per cent at £10.6bn in June, although the number of loans was down 1 per cent year-on-year at 61,000.
Buy-to-let had a strong June, with lending up 54.5 per cent year-on-year at £3.4bn. By volume, lending was up 38.1 per cent at 22,100.
CML director general Paul Smee says: “Notable this month is the uptick in remortgage activity among homeowners, perhaps reflecting an increased desire to lock into competitively priced mortgage deals in advance of any rise in rates. It is likely that people are beginning to feel a rate rise is a realistic prospect.
“After a slower-than-expected start to the year, lending appears to be picking up as we expected, and in line with our revised forecasts.”
SPF Private Clients chief executive Mark Harris says there is “no surprise” over the increase in remortgage lending given the Bank of England’s recent messages that a rate rise is near.
He adds: “A few lenders have increased their fixed-rate pricing but there are still plenty of excellent deals and there will continue to be as lenders compete for business. Lenders continue to struggle to meet volume targets and will absorb much of any underlying increase in swap rates via lower margins.”