Remortgages hit nine-year high despite base rate rise

REMORTGAGE loan approvals rose to a nine-year high in November, just as borrowers were experiencing the first base rate increase in over a decade, Bank of England figures show.

Some 53,922 remortgage loans were approved, marking the highest figure since October 2008, the Bank’s Money and Credit report said.

The report also showed that consumers’ borrowing using credit cards, personal loans and overdrafts fell back to a near two-year low in the run-up to Christmas, prompting suggestions that rising interest rates may have had a “significant psychological impact” on some potential borrowers.

The number of mortgage approvals made to home buyers also edged up month-on-month in November to 65,139, from 64,887 in October.

This figure was still slightly below the monthly average of 66,562 over the previous six months.

The Bank of England base rate was increased from 0.25% to 0.5% in early November — the first increase in more than 10 years.

Jeremy Leaf, a London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said the large number of remortgage loans in the latest figures suggests borrowers were seeking to protect themselves from further potential increases in interest rates.

On the general housing market, he said: “Looking forward, we anticipate a fairly steady market in early 2018 and no great changes one way or another.”