Remortgage approvals jumped to nine-year high in October

The number of remortgage approvals being made jumped to a nine-year high just before the Bank of England base rate was hiked in November, figures show.

Some 51,593 remortgage approvals were recorded by the Bank of England in October - the highest figure since October 2008.

On November 2, in a move that was widely anticipated, the Bank of England base rate was raised from 0.25% to 0.5%, meaning some variable rate mortgage holders faced the prospect of higher costs.

Many home owners may have been looking to remortgage to a cheaper deal in the weeks leading up to the base rate hike.

The Bank's figures also show that the number of mortgages being approved for house purchase fell to a 13-month low of 64,575 in October.

And the report showed a further cooldown in the annual growth in consumer credit - to its lowest levels in a year and a half.

Consumer credit, which includes borrowing using credit cards, personal loans and overdrafts, showed annual growth of 9.6% in October, edging down from 9.8% in September and 10% in August.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Mortgage rates continue to be competitive despite the base rate rise earlier this month."

Howard Archer, chief economic adviser at EY ITEM Club, said: "It remains to be seen whether the Bank of England's interest rate hike on November 2 will have a marked dampening impact on consumer borrowing.

"While the increase was just 25 basis points and interest rates are still at historically very low levels, a number of consumers could be vulnerable given high borrowing levels.

"There may also be a psychological impact on potential borrowers given that it was the first interest rate hike since 2007."

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

"There are clear signs that lenders are markedly reining in the amount of unsecured credit available to consumers and also tightening their lending standards."

Read Full Story

FROM OUR PARTNERS