Mortgage approvals soar in July, BBA says

Purchase approvals rose 11 per cent over the period, from 41,316 to 46,033, while approvals for other secured lending rose 3.3 per cent, from 6,794 to 7,017.

“Savvy homeowners are snapping up competitive deals before an expected increase in interest rates”, BBA Chief Economist Richard Woolhouse said.

The number of mortgage approvals in Britain rose in July to their highest level in 17 months, the British Bankers’ Association said on Wednesday, the latest sign that Britain’s housing sector is rebounding.

Borrowers are locking into cheap fixed-rate mortgages before they disappear.

There were also big rises in Scotland, Wales and Northern Ireland.

Remortgaging applications jumped 29% year-on-year to reach their highest level in four years, as borrowers aimed to secure a fixed rates mortgage ahead of a potential interest rates hike by the Bank of England.

The BBA’s statistics also showed that deposits into Isas fell by more than £400m in July, although it cautioned that direct comparisons can not be made with past year as the change to Isa limits last July led to substantial deposits of £4.9bn that month.

The average two-year, fixed-rate deal has risen from 2.76 per cent on August 1 to 2.82 per cent yesterday, according to financial data firm Moneyfacts. That was up from 44,802 in June and up 11 percent from a year ago.

Gross mortgage borrowing was around £11.8bn in July, 11.5 per cent higher than in July 2014.

But the Bank has moved to dampen expectations that it could come as soon as this year and experts believe the recent stock market turmoil caused by China’s economic slowdown will see the UK enjoy rock-bottom interest rates for longer.

But experts last night said the ongoing uncertainty means borrowers should hurry to get the best deals before they are withdrawn.

Remortgaging activity has also been surging as homeowners worry over an impending rise in interest rates after more than six years at the historical low of 0.5%. Many homeowners now have a much stronger financial footing. At the moment, a wide array of record low deals remain, despite some initial withdrawals, and it is these that homeowners are tapping into.