Remortgaging surges as borrowers prepare for rate rise

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 today, show remortgage lending was up 34 per cent year-on-year to £5.1bn. By volume, remortgage loans were up 31 per cent annually, at 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 home-owners, 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 now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility. 

“After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts.”

SPF Private Clients chief executive Mark Harris says there is “no surprise” remortgage lending increased given the Bank of England’s recent messages that a rate rise is nearing.

He adds: “A few lenders have increased their fixed-rate pricing but there are still plenty of excellent deals available and 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.”