Homeowners switching lenders and higher capital repayments made by borrowers produced monthly contractions in net borrowing through much of 2013, but in the last few months the overall mortgage stock has started to rise.
On a non-seasonally adjusted basis gross mortgage lending in January reached £10.6bn, 41% higher year-on-year while net lending rose to £1.27bn in January this year compared to a drop of £86m in January 2013.
This put the stock of outstanding mortgages at £9.3bn last month compared to £7.6bn in January 2013.
Adrian Anderson, director of mortgage broker Anderson Harris, said: “Remortgaging is high, stimulated by the fact that Funding for Lending money has enabled lenders to offer some of the lowest ever five-year fixed rates. A lot of buyers have been able to take advantage of that.
“Borrowers sitting on high standard variable rates have jumped off and switched to lenders with more competitive rates.”
Anderson said higher capital repayments may indicate that borrowers have taken advantage of ultra-low interest rates and been overpaying on their mortgage in anticipation of an interest rate movement possibly next year.
Meanwhile house purchase approvals increased by 56%, non-seasonally adjusted, from £4.1bn in January 2013 to £6.4bn last month.
The BBA’s lending statistics account for approximately two-thirds of all UK mortgage lending.
