With the possibility of a base rate rise in May, the April mortgage market was unsurprisingly buoyant. Mortgage approvals increased by 11% on the previous year and gross mortgage lending reached £20.4bn – an increase of 13.3% on 2017.
The anticipated base rate rise would have been a driving factor for many borrowers wanting to secure lending whilst it was still cheap. According to data from UK Finance, a 30% rise in remortgaging was largely responsible for the increase in lending, with borrowers being driven to secure a good deal whilst rates are low.
The data also shows that the main high street banks estimated that there were 40,564 home purchase approvals in April, an increase of 1.7% year on year.
Rates will rise again
Managing director of UK Finance Eric Leenders said: “April saw steady growth in mortgage lending and approvals, following a slowdown in activity the previous month. This was driven by strong remortgaging levels, as borrowers locked into attractive deals amid expectations of a base rate rise.”
After the 11.6% fall in mortgage lending in March, it is not surprising that April proved to be dynamic. When an increase in borrowing is rapidly looming, borrowers are usually driven to act. Since the Bank of England decided to keep things on hold for a while longer, it will be interesting to see whether the growth in lending continues.
Mortgage lenders have been steadily increasing rates since before the base rate rise announcement, (27 providers increased rates in April), but good deals and low rates can still be found. For those seeking a mortgage or remortgage within the next six months, acting now to secure a deal should be a priority as the Bank of England have indicated that rates will rise again– we’re just not sure when.