Figures published by the Council of Mortgage Lenders (CML) showed that remortgage lending grew by 31% on May, with the value of loans to homeowners reaching £5.1bn in June.
The number of remortgage loans taken out by borrowers in June totalled 31,600, growing by 30% compared to May and 25% on the same period in 2014.
Paul Smee, director general of the CML, said the boost in remortgage activity could be a reflection of an increased desire among consumers to lock into competitively-priced mortgage deals in advance of any rise in the bank base rate.
“It is likely that people are now beginning to feel a rate rise is a realistic prospect, and not just a distant theoretical possibility,” he said.
House purchase lending increased substantially, with over 20% more loans being advanced to purchase a house compared to May. While the value of house purchase loans saw a notable monthly increase of 25% to £10.6bn, the number and value of loans remained relatively steady compared to June last year.
Overall in June, the value of homeowner loans for house purchase accounted for 54% of gross lending, while remortgage activity accounted for 25%.
Lending to first-time buyers improved, with monthly lending up 24% to £4.2bn in June, compared to £3.4bn in May. However, growth in the value of lending compared to the same time last year remained flat, while the number of loans was 2.4% lower than a year earlier.
Remortgage activity in the buy-to-let sector was also strong, with overall growth in the sector driven mainly by a surge in strong remortgage lending. The value of remortgage loans totalled £1.8bn in June, a 29% increase on May and 64% rise on the same time last year. Gross lending in buy-to-let totalled £3.4bn in June, with the value of house purchase lending rising by 16.7% month-on-month.
Buy-to-let as a proportion of total lending remained at around 17% in June but still makes up a larger portion of total lending compared to the same time last year.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “It remains to be seen whether the recent changes to claiming mortgage interest relief and the wear and tear allowance will have a negative impact on the sector.
“Remortgaging has been particularly strong and we expect this to be the case in coming months as borrowers critically assess their investments and look at ways of maximising their profits. We expect the majority of investors will still consider buy-to-let to be a good investment and carry on regardless.”
