Burst of remortgage activity was seen by high street banks in October

The number of remortgage loan approvals being made leapt by more than a third year-on-year in October - ahead of November's widely anticipated base rate increase - according to a high street banking report.

Trade body UK Finance said there was a "flurry" of remortgage activity as home owners snapped up the low rates on offer - but its figures also show mortgage approvals for house purchase in October were at their lowest levels in over a year.

Commenting on the report, economists said housing market activity has cooled in recent weeks - and this week's stamp duty cut for first-time buyers will not do much to counter the downturn.

UK Finance's figures show there were 40,488 mortgage approvals made to home buyers in October - the lowest monthly total since September 2016.

Meanwhile, remortgaging approvals, at 34,036, were well up on the monthly average of 27,163 over the previous six months - and more than a third, or 37%, higher than in October 2016.

The Bank of England base rate was raised from 0.25% to 0.5% on November 2, with borrowers on variable rate mortgages facing higher costs.

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Some of these borrowers will be sitting on their lender's standard variable rate (SVR), which can happen when an initial mortgage deal comes to an end.

UK Finance's senior economist Mohammad Jamei said: "The anticipated bank rate rise saw a flurry of remortgage activity as many home owners took advantage of the competitive rates on offer.

"Borrowing was also boosted by stronger first-time buyer activity as this segment benefited from good credit availability, lower rates and Government housing schemes."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that since the base rate hike: "Housing market activity likely has cooled further in recent weeks, given that mortgage rates have moved swiftly higher and consumer confidence has weakened."

He said that with the possibility of rates rising further, the downturn in activity could gain a new lease of life.

Mr Tombs said the Government's stamp duty cut for first-time buyers in this week's Budget "won't do much to counter this downturn, primarily because it will push up prices".

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Howard Archer, chief economic adviser for EY ITEM Club, said: "October's drop in mortgage approvals to a 13-month low reinforces our belief that there is unlikely to be a sustained, significant upturn in housing market activity any time soon.

"Housing market activity is being pressurised by weakened consumer purchasing power and substantial consumer wariness over engaging in major transactions. Potential house buyers may also be concerned by the Bank of England hiking interest rates on November 2."

UK Finance also said annual growth in credit card borrowing was 5.1%, compared with 5.5% the previous month.

Mr Archer said: "The Bank of England will be pleased with the clear slowdown in consumer credit in October and will be looking for a continuation of this trend."

Meanwhile, personal deposits grew by 2% annually in October - the same rate as September and the lowest annual rate since May 2009.

Within personal savings, there was a net outflow of £1.5 billion from cash Isa deposits held with high street banks in October.

Non-financial businesses' deposits showed annual growth of 5.8%.

Mr Jamei said businesses "have continued the trend of bolstering their cash reserves amidst a cautious business landscape due to Brexit uncertainties".