Increased competition amongst mortgage lenders and the rush to buy investment properties before the April 1 stamp duty surcharge deadline have been cited as the reasons why mortgage borrowing rose unexpectedly sharply in the run-up to Christmas.
The number of mortgage loan approvals for house and apartment purchases rose to 70,837 in December - the increase was against the usual end-of-year trend and compares with an average of 69,462 over the previous six months.
The number of approvals for remortgaging was 41,708, compared to the average of 39,540 over the previous six months, while other mortgage lending also rose to a level above the half-year average.
Buyers borrowed £12.3bn – up from £10.1bn in the same month of 2014 – while remortgagers rolled over £4.8bn of loans, up from £3.8bn a year earlier.
All the figures come from the Bank of England’s latest report.
“December was the busiest month for remortgaging in over two years, with activity growing more than twice as fast as overall approvals. The continued appetite for remortgaging was likely to be a sign of homeowners eager to capitalise on market competition and lock into lower rates” says Peter Williams from the Intermediary Mortgage Lenders Association.