In August, lenders approved 123,646 mortgage advances, a 4% increase on the previous month. The growth in demand for home finance was strongest among remortgage borrowers. Compared to August last year, the number of remortgage approvals has grown by 29% from 31,741 transactions to 40,931. On a monthly basis this accounted for a 5% rise.
The last time remortgage approvals exceeded this figure was in October 2008 when 73,467 deals were approved.
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said: “The remortgage market in particular has experienced a burst of activity with approvals for remortgage rising more than twice as fast as those for house purchase year-on-year.
“Falling mortgage rates mean both new buyers and existing homeowners stand to make significant savings by locking into one of the current deals on the market. This time of year often sees an influx of competitively priced products as lenders adjust their offering based on end-of-year targets so it’s likely borrowers will continue to benefit from affordable rates. However, with a base rate rise expected in 2016 borrowers would do well to make the most of current pricing while it’s still around.”
House purchase approvals, which represent the largest type of loan request, increased by 12% year-on-year to 71,030 and rose 3% on July’s figures. House purchase approvals were at their highest level since January 2014.
Gross lending in August followed a similar strong growth trend with £19.1bn lent out in August, a 13% rise on the £17bn lent out in August 2014. Monthly, gross lending rose by 3% from £18.6bn.
