The central bank’s data shows the much anticipated remortgaging maturity boom of this autumn drove significant activity in the lending market.
This also coincided with the build-up to the Bank of England’s first base rate rise in a decade. However, house purchases slipped slightly in number and value.
The total number of mortgage approvals grew slightly to 129,885 – up 1.4% – in October compared to September.
This was driven by remortgaging approvals which increased to 51,593, up 7% from 48,133, the highest number since October 2008. Remorgaging value hit £9.3bn, up from £8.5bn.
House purchase mortgage approvals fell to 64,575, down 2.3% from 66,111, in October for a total of £11.9bn, down from £12bn in September.
The BoE noted that the annual growth rate of consumer credit was broadly unchanged at 9.6% in October.
Base Rate rise
Legal and General Mortgage Club director Jeremy Duncombe noted these were the final set of figures before the Bank of England raised the base rate to 0.5%.
“Any spike in mortgage approvals could therefore be a result of borrowers rushing to lock in a fixed-rate deal before rates increase. It will therefore be interesting to see what next month’s figures show,” he said.
Just Mortgages and Spicerhaart group operations director John Phillips added that although there had been an increase in first-time-buyer activity, remortgage volumes were a key component in keeping the market at the present level.
“The opportunities that remortgages will provide to brokers in the coming months cannot be overstated,” he said.
“Although the government’s plans are admirable, we cannot build new houses overnight. Until more homes get into the supply chain there is little opportunity for many homeowners to move up that chain.
“Advisers will need a good back book, and contact strategy, if current levels are to be sustained,” he added.