Number of remortgage loans at highest level since November 2017

Home owners snapped up the highest number of remortgage loans in nearly two years in August, figures from a trade association show.

Some 31,627 remortgage loans were handed out for the highest monthly total since November 2017, according to data from UK Finance.

Kevin Roberts, director of the Legal and General Mortgage Club, said households are continuing to take advantage of “the exceptionally competitive mortgage rates available”.

The number of mortgages being approved to home buyers dipped to 42,576 – marking a three-month low.

UK Finance also said the level of credit card borrowing grew by 3.3% in the year to August.

It said repayments remained in line with credit card spending, “showing that consumers are managing their finances effectively overall”.

Borrowing through personal loans in August was 4.5% higher than in the same month a year earlier. Overdraft borrowing was 1.2% higher.

The longer-term trend has seen overdraft borrowing decline, UK Finance said.

Howard Archer, chief economic adviser at EY ITEM Club, said the number of mortgage approvals to home buyers in August was still above the 38,000 to 40,000 range largely seen from late 2017 to early 2019.

He said: “It is possible that housing market activity may have recently got a modest lift from house buyers looking to get their move sorted out before Brexit is due to occur on October 31, given the major uncertainties as to what exactly will happen then.

“With the economy largely struggling and the outlook highly uncertain, we suspect that house prices will remain soft. Consequently, we expect house prices to only rise around 1% on most measures over 2019.”

Mr Archer added that lenders have become more careful about advancing unsecured (non-mortgage) credit.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “On the ground we are seeing a market still in limbo awaiting direction but nevertheless getting on with buying and selling, albeit at more competitive price levels and even if the overall transaction time is lengthening.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said mortgage rates could edge lower in the coming months.

He said: “We continue to expect housing demand to hold up well, despite elevated levels of political uncertainty.”