After a four-year low in mortgage approvals, the numbers have now begun to bounce back, with rises in both first-time buyer mortgages and remortgages recorded last month.
UK Finance has reported that both mortgage and remortgage approvals have risen in recent months. New mortgage approvals increased to 40,117 in January, up from 36,085 in December 2017, and remortgage approvals have risen by 9% since February 2017.
Speculation of interest rate rises and buy-to-let changes are likely to be the reason behind the increase in mortgage approvals as borrowers take steps to secure new deals now. Eric Leenders, managing director of personal finance at UK Finance, said: “There has been an increase in remortgage approvals compared to last year, as borrowers look to lock-in to attractive deals amid speculation of further interest rate rises later this year.”
A new positive trend
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However, first-time buyers may well account for a large number of new mortgage approvals, with an overall increase in their market share to 29%. This is a 2% increase on January this year, and a 22% rise in the market share recorded in 2017. According to the National Association of Estate Agents, this is probably due to the Chancellor’s stamp duty relief beginning to have the ‘desired effect’.
The increased number of mortgage and remortgage approvals brings the UK market out of a four-year low. According to UK Finance, the 11% monthly jump is most likely reflective of people taking advantage of mortgage deals on offer at the end of last year – however, it will help to settle any nerves around the sustainability of the housing market following the decline in mortgage approvals last December.
