Gross mortgage lending reached £24.6bn in July, according to latest figures from trade body UK Finance, its highest level since March 2016.
Lending was up 7.6% compared to a year earlier, UK Finance said, although the number of mortgage approvals by the main high street banks fell by 0.8% compared to July 2017. Remortgaging approvals were up 2.8% compared to the same month a year earlier, with many homeowners rushing to take advantage of low fixed rate deals prior to August’s base rate increase.
“July saw steady growth in gross mortgage lending, driven largely by remortgaging as homeowners locked into attractive deals in anticipation of the recent base rate rise,” said UK Finance director Peter Tyler. “However, the broader economic outlook remains mixed, with households continuing to see their incomes being squeezed by rising inflation.”
Remortgaging in London reaches nine-year high
All regions of the UK have seen strong levels of remortgaging in the second three months of the year, according to UK Finance’s regional trends data.
Remortgaging in Wales and London was up 17.1% and 16.9% respectively compared to the same period last year, with Northern Ireland and Scotland each recording a 9.5% increase. Around 15,200 people remortgaged in London in the second quarter of the year, UK Finance said, up from 13,000 in the same quarter last year and a nine-year high.
These high levels of remortgaging can be attributed partly to borrowers finishing their two and three-year fixed products and locking into new fixed rate deals.
First-time buyer activity was strongest in Northern Ireland, due in part to the affordability of properties. However, first-time buyer activity is showing signs of slowing in London, Wales and Scotland. According to UK Finance, this is likely to be due to concerns over wage growth and worries about how the UK will negotiate its exit from the EU. Home-moving activity has also slowed in Scotland, Wales and London over the past three months. Northern Ireland again bucked the trend, with 6.7% more home-mover mortgage completions in the second three months of the year compared to the same quarter last year.
Mortgage lending increased in July