THE NUMBER of remortgages approved in August soared, fuelling a small rise in the overall mortgage market, according to figures from UK Finance.
The trade association’s data for last month showed that mortgage approvals by the main high street banks rose by 0.7 per cent compared to a year earlier.
The increase was caused by a 9.2 per cent rise in remortgages during the month while house purchase borrowing fell 4.3 per cent.
“It’s been a strong summer for mortgage lending, but this month’s figures suggest that this may be cooling off, perhaps as people rushed to secure finance before the Bank of England base rate rise,” said John Goodall, chief executive of Landbay.
“This year has been one of upheaval for the mortgage sector. For the buy-to-let market specifically, we are approaching the anniversary of the PRA changes, and more generally we are nearing the anniversary of the first rate rise in a decade.
“Uncertainty remains in the market as we edge closer to Brexit, so it is likely to be at least a year before we arrive at the new normal.”
There was also a mixed picture in the business lending sector, according to UK Finance’s figures.
Lending to manufacturers grew by 7.4 per cent in the last 12 months, in contrast to a wider 2.1 per cent contraction overall in UK business borrowing.
Read more: UK consumer borrowing slumps in July
Meanwhile, UK business deposits for non-financial companies grew by 1.5 per cent in the last 12 months.
“It is encouraging to see net lending to businesses growing for the third consecutive month, with borrowing by non-financial companies increasing by £573m in August,” said Stephen Pegge, managing director, commercial finance at UK Finance.
“Lending to the manufacturing sector continues to grow year on year but overall business borrowing remains subdued, as ongoing economic uncertainty impacts on long-term investment decisions.
“There has also been a further slowdown in the growth of business deposits, suggesting firms are experiencing tighter margins as a result of rising input costs.”