The expected increase in the Bank of England base rate and an increase in first time buyers created a flurry of activity for remortgages in the UK in October, the latest figures suggest.
Some £23.1 billion was borrowed in October 2017, which was 14% higher than the same month in 2016, according to the estimates from UK Finance.
Senior economist Mohammad Jamei said many home owners took advantage of the competitive rates on offer. ‘Borrowing was also boosted by stronger first time buyer activity as this segment benefitted from good credit availability, lower rates and government housing schemes,’ he explained.
In Wales home buyers borrowed £1.17 billion, up 9% quarter on quarter and 16% year on year with first time buyer borrowing reaching £510 million, up 4% and 13% and remortgage activity at £560 million, up 19% both quarter on quarter and year on year.
Julie-Ann Haines, chair of UK’s Finance’s Wales mortgage committee, pointed out that home lending in Wales is now at its highest level for a decade and as with elsewhere in the UK borrowers took the opportunity to lock into historically low borrowing rates ahead of the widely anticipated increase in base rate earlier this month.
In Scotland home buyers borrowed £2.55 billion, up 1% quarter on quarter and 15% year on year. First time buyers borrowed £1.04 billion, down 2% on the second quarter but up 11% on the third quarter of last year. Remortgaging activity totalled £980 million, up 8% quarter on quarter and 9% year on year.
Home buyers borrowed £6.74 billion in London, up 10% quarter on quarter and 13% year on year with first buyers borrowing £3.31 billion, up 7% on a quarterly basis and 9% year on year while remortgaging activity totalled £4.49 billion, up 15% and 4%.
Affordability remains challenging in London, according to UK Finance’s head of mortgage policy June Deasy. ‘But borrowing by first time buyers grew strongly in the third quarter and reached its highest level for a decade,’ she said.
‘Remortgaging was also robust as London borrowers sought to lock into historically low borrowing rates ahead of the widely anticipated increase in base rate,’ she added.