The British Bankers’ Association (BBA) says that mortgage approvals for house buying in September have fallen to a four month low because there is, they claim, a lack of property available.
While the number of approvals was 44,489, the figure is still 14% higher than it was a year ago.
In addition, a decline in overdraft and personal loans was also noted between August and September and there was also a drop in net credit card lending too.
The BBA’s chief economist, Richard Woolhouse, said: “Remortgaging is high with savvy customers securing attractive deals before a possible rate rise.
“The mortgage market borrowing figures are strong with customers taking advantage of the record low interest rates.”
House prices in the UK
House prices in the UK have been strengthening in recent months fuelled by the limited supply of new housing.
While the number of mortgages being approved is at its lowest since May, credit card lending has dropped to its lowest since September last year.
The figures do not include mortgage lending from mutually owned building societies, they account for around a third of all mortgages in the UK, and the BBA’s report is recognised as pointing to the trends in the Bank of England’s own data.
The prospect of a rate rise occurring in the next few months are beginning to recede but the Bank of England is still urging households with excessive debt to prepare for an increase.
In addition, mortgage borrowers are particularly being warned that they should be prepared for a rate rise and many are heeding the advice to remortgage at current low record rates.
Indeed, the UK’s remortgaging sector is going from strength-to-strength as borrowers try to lock in low rates over fixed terms.
Remortgaging loans grew by 12%
Property services firm LMS says that remortgaging loans grew by 12% from August to September to reach 28,686.
They add that the remortgaging figure is also 4% higher than September last year.
In addition, house prices in the UK may have reached their peak, according to consultants Hometrack who say that the pace of growth is now slowing.
The firm adds to that there’s a big variation in performances between regions with some seeing prices for, such as Belfast, while house prices in parts of London are 43% higher than they were a year ago.
Firm’s bridging loan record
Meanwhile, a bridging loans firm has announced its best ever month with September recording their highest number of bridging loan completions.
Broker Loan.co.uk said the rise is part of its strategy of becoming the one-stop specialist financial shop for its intermediary partners.
The firm’s chief executive, Paul McGerrigan, said one reason for the rise was product innovation from lenders who are ‘forward-thinking’.
Second mortgage and bridging lenders
He added that low borrowing rates are also helping to fuel the rise and that a wide range of second mortgage and bridging lenders was crucial to their successful strategy.
Mr McGerrigan said: “Customers do not have a preference when they need money and our job is to help provide solutions as professional finance specialists that suit personal requirements and circumstances.”