Remortgaging climbs to 6-month high

Remortgaging climbs to 6-month high

Mortage lending rose in June driven by remortgaging reached its highest level since January, according to the Bank of England.

The number of loan approvals on secured dwellings climbed to 122,765 in June – up from 121,626 in May but below the previous six-month average of 123,827.

Lending was also up by value, from £19.9bn to £20.5bn

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Remortgaging approvals rose from 43,185 in May to 44,548 – beating a six-month average of 43,753.

But there was a fall in the number of loans approved for house purchase, from 65,109 to 64,684 in June.

It follows a succession of data pointing to a slowing market, with figures from Halifax showing house price growth reached its slowest pace in four years in June.

UKFinance recently estimated that gross mortgage lending reached £22.1bn in June, 9 per cent more than May’s lending total of £20.3bn.

Alastair McKee, managing director of UK-wide independent mortgage broker One 77 Mortgages, said: "Against a backdrop of political and economic uncertainty, house purchases have hit a plateau. 

"With the exception of first-time buyers, who are making the most of the retreat of landlords, the purchase market is stagnant at best.  

"The increase in the number of remortgages reflects how more and more people are anticipating a rate rise, potentially before the end of the year.

"High inflation is putting pressure on the Bank of England to raise rates, and people want to lock in before the interest rate up-cycle begins.

"When interest rates do go up, however well the process is managed, there is likely to be a considerable amount of financial fallout.”