Homeowners remortgaging has reached the highest number since 2008 as they securing mortgage deals before a rise in interest rates.
Data from UK Finance shows 49,800 new remortgage buyers loans were completed in January 2018, a rise of 19.1% compared to the same month a year earlier.
This is the highest monthly number remortgages for a month since November 2008 when there were 51,300 loans completed and is 58.1% higher than the previous month.
The value of remortgage loans in January 2018 was £8.9 billion which is 20.3% more year-on-year and is 61.8% higher than in December 2017.
Jackie Bennett Director of Mortgages at UK Finance said, the nine year high was reached as a number of fixed rate mortgages came to an end while borrowers locked into attractive deals amid expectations of further interest rate rises.
House purchases only slightly better
Jackie Bennett said, there was the usual dip in both first time buyers and home movers post December, but mortgage lending in both segments increased compared to the same period in 2017.
New loans to first time buyers increased by 7.0% for the year to 24,500 while the value of mortgages improved by 11.1% over this period to £4 billion.
For home movers the numbers were 25,000 for January 2018, a 6.3% improvement year-on-year while the value of loans of £5.4 billion were 10.2% higher than a year ago.
Compared to December 2017 loans to first time buyers reduced from 30,800 with a value of £5.1 billion and loans to home movers reduced from 30,800 with a value of £6.6 billion.
The average first time buyer is aged 30, borrowing £139,500 with a gross income of £41,000 compared to a home mover aged 39, borrowing £180,000 and gross household income of £55,000.
Mortgage rates remain competitively low
Since November’s base rate rise of 0.25% lenders have increased their mortgage and according to Moneyfacts two-year fixed rates have increased from 2.20% in October 2017 to 2.40% in February 2018.
For remortgage buyers the threat of higher base rates from the Bank of England has motivated them to secure low mortgage rates.
There is plenty of choice as the number of attractive mortgages deals from lenders available to remortgage buyers has increased by 41% over the year to 39,943.
While an increase in remortgaging is expected in the New Year as people put their household finances in order, the strong growth is above the seasonal fluctuations we tend to see at this time of year, says Jackie Bennett.
Lower interest rates have also benefited older homeowners as there is higher activity with equity release buyers accessing wealth in their property to gift to a family member or friend or even buy a more expensive home.
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