While gross mortgage lending remained stable in October with figures totalling £10bn, remortgaging levels soared by 38% on last year’s figures to £3.3 billion.
According to the latest CML/DETR survey of mortgage lenders, loans for house purchase continued to fall from £6.4 billion to £6.1 billion, representing a 20% decrease on October last year.
Peter Williams, deputy general at CML, said: “While both the number and value of loans for house purchase have decreased year on year, remortgaging activity remains very strong and is accounting for an increasing share of total lending.
“Owner-occupier households now have significant amounts of housing wealth. Allied with a competitive range of mortgage products and the growing expectation that interest rates have now peaked, high levels of remortgaging activity can be expected for the forseeable future.”
Average new variable mortgage interest rates fell from 6.14% to 6.11%, with 68% of new mortgage loans taken out on variable rates, a 1% fall from September. Fixed mortgage interest rates increased from 6.30% to 6.35%.
The Building Societies Association (BSA) saw building society gross advances amount to £2,219 million in October, an increase on September’s figure of £2,168 million.
New mortgage lending by the Major British Banking Group (MBBG) stood at £5,986 million in October, a fall from September’s £6,028 million result. According to the British Bankers’ Association (BBA), 133,348 new mortgage loans were approved in October, totalling £6,596m.
Tim Sweeney, director general of the BBA, said: “The banks’ mortgage lending was weaker in October, but there were still some signs of life in the mortgage market, albeit at lower levels than a year earlier.
“Approvals of new loans for house prices were the strongest since June and other secured loans also edged up.”