Mortgage approvals back on the up
Mortgage approvals rose slightly at the end of last year, according to figures from the Bank of England.
The number of approvals for purchases in November stood at 48,019, marginally higher than the figure for October of 47,315.
But the biggest increase came in the remortgage market. The number of approvals in the remortgage market hit 34,262 in November, nearly 4000 more than in the previous month, representing an increase of £400 million worth of loans.
The remortgage market had almost ground to a halt since the credit crunch hit with most borrowers opting to stick with their lenders SVRs. With the Bank of England base rate at its lowest ever figure at 0.5%, lenders could not offer deals competitive enough to attract borrowers.
The new figures highlight the improvement in the remortgage products offered by lenders. Inevitable interest rate hikes have also prompted borrowers to look at remortgaging onto fixed rate deals.
First-time buyers have also been given something of a lifeline in the last couple of months with more lenders offering slightly higher loan-to-value mortgages, meaning a smaller deposit is required.
But experts say the figures do not mean the market has turned a corner.
"While these figures are encouraging and any positive sentiment is welcome I don't think they reflect a turning point on the market," says Jonathan Cornell, spokesman for First Action Finance. "With funding so constrained there is little chance of a sustained recovery until there is more mortgage funding."
Changing mortgages without moving home. Property owners chiefly remortgage to get a better deal but some do so to release equity in their homes or to finance home improvements, the costs of which are added to the new mortgage. Even though you’re not moving house, you still need to engage solicitors, conveyancing and the new lender will require the property to be surveyed and valued.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.