Gross mortgage borrowing by high street banks hit £12.4bn in December, 24 per cent up on a year ago, while overall new borrowing in 2015 was £137.8bn, some 6 per cent up on the previous year.
The British Banking Association’s latest figures also revealed that the number of mortgage approvals in December was 24 per cent higher than a year ago, with remortgaging up 31 per cent and house purchase up 19 per cent.
Despite slackening a little towards the end of 2015, all months last year exceeded their corresponding months in 2014.
After seeing demand fall in the second half of 2014, the BBA reported overall mortgage stock has recovered and is now 2.2 per cent more than it was a year ago.
Adrian Anderson, director of mortgage broker Anderson Harris, pointed out mortgage approvals are improving, but far from racing away growth is now more moderate and therefore more sustainable than it was in the past.
He said: “While December finished with a strong performance on the lending front, January has also got off to an unseasonally good start as those investors and second homebuyers keen to beat the stamp duty hike from April have only really got until the end of February to secure a mortgage.
“They may have to accept that they won’t get a market-leading rate as they will need a lender who can perform quickly.”
SPF Private Clients’ chief executive Mark Harris suggested challenger banks have helped push rates down to record lows and with interest rates unlikely to increase anytime soon, low rates are expected to continue.
He said: “The biggest issue for many is actually qualifying for one of these great mortgage deals.
“Tighter affordability criteria as a result of the Mortgage Market Review mean certain groups are finding it hard, such as older borrowers, the self-employed and those requiring interest-only mortgages.”
He added that remortgaging numbers moderated in December and are unlikely to surge in coming months, as comments from the Bank of England suggest that a rate rise is off the agenda at least for now.
peter.walker@ft.com
