Mortgage approvals up 33% on January 2015

Mortgage approvals up 38% on January 2015 The number of mortgages approved by high street banks was 33% last month compared with January 2015.

The rise is being attributed to a rush on second homes ahead of the new 3% stamp duty charge set to come in at the end of next month.

The number of remortgages has risen by 42% with the number of approvals for house purchase up 27%.

Gross mortgage borrowing is also up, 38% higher than twelve months ago and is now at its highest level since mid-2008, in line with the increase in house prices.

Richard Woolhouse, Chief Economist at the BBA who published the data, said: “The start of the year has seen a significant rise in mortgage borrowing. It seems that this has been driven, in part, by borrowers looking to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect in April.

“Net lending to non-financial companies saw the biggest monthly jump since July 2008 as businesses take advantage of record low interest rates. Demand from the transport, storage and communication and construction sectors was particularly strong.”

Richard Sexton, Director of chartered surveyor e.surv, said: “Mortgage lending levels keep moving in the right direction – encouraging more people to take advantage of the house purchase funding options on offer and make the leap onto the property ladder. Delayed interest rate hikes, continually low inflation and higher employment have all brought an element of stability into the market, but it’s not all smooth sailing ahead – stamp duty changes are creating uncertainty, particularly for the buy-to-let sector.

“Speculation on the outlook for this sector is causing a knock-on in lending. Ahead of looming tax changes, buy-to-let lending is enjoying a boost. Post April, the sector will no doubt persist but there is a degree of thoughtfulness among prospective landlords. And it’s not all about buy-to-let. Homeowners seeking a second home will also be affected. These impacts appear to have created a short term uplift in related buying activities.”

Today's Conveyancer