According to the Bank of England’s (BoE) Money and Credit statistics, the average rate for outstanding mortgages also fell to a low of 2.02 per cent.
Compared to October, the rates on newly drawn mortgages fell by nine basis points while outstanding rates dropped by one basis point.
John Phillips, national operations director at Just Mortgages, said: “While rates are expected to rise following the Bank of England increasing base rate in December, they will be increasing from a historically low starting point.
“The ‘effective’ interest rate on newly drawn mortgages fell to 1.50 per cent in November, and these low rates may help spark activity with buyers looking to capitalise before rates inevitably rise.”
Mark Harris, chief executive of SPF Private Clients, added that although the base rate rose last month, “lenders remain keen to lend and have plenty of cash to do so, so we expect mortgage rates to be competitive for the foreseeable future”.
Gross mortgage repayments increased to £19.4bn in November from £18.2bn in October, according to the BoE data.
Net mortgage borrowing amounted to £3.7bn during the month, a notable rise from £1.1bn in October. The Bank said October’s figure was low as people borrowed in September instead to take advantage of the final phase of the stamp duty holiday.
However, November’s figure was £2.9bn below the 12-month average to June 2021 when the stamp duty holiday was in full effect.
Mortgage approvals
Mortgage approvals for house purchase totalled 66,964 in November, relatively flat on the 67,103 seen in October. This was the lowest number of approvals since June’s 40,500 but close to the 12-month average in the year to February 2020.
Remortgage approvals reached 44,529, up from 41,978 the month before.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “These figures show that the housing market is moving into more ’normal territory’ as mortgage approvals return close to their pre-Covid averages.
“Certainly, we are finding in our offices much the same pattern as buyers and sellers shrug off the loss of the stamp duty holiday and get down to business in the new year, especially as supply and demand are beginning to match up more closely.”
Andrew Montlake, managing director of Coreco, added: “Enquiry levels remained robust right up until Christmas as people looked to take advantage of low rates and protect themselves against a potential rising rate environment.
“We’re expecting 2022 to be a record year for remortgage activity with a huge amount of borrowers coming to the end of their existing mortgage products, all of whom will be keen to fix in early to the lowest rates available.”
He continued: “Lenders, meanwhile, will continue their rate wars, with the top six banks awash with cash to lend and new lenders determined to get a foothold and increase their market share. We will also continue to see lenders improve their criteria to appeal to more borrowers, who will be further helped if there is a general relaxation of the stress tests.”
