The mortgage market is hotting up, according to new figures, as rock bottom rates and the prospect of an interest rate rise fuel extra home buying and remortgaging.
Net lending secured on dwellings jumped to £2.6bn in June, from £2.4bn in May, the highest figure since July 2008, the Bank of England said today.
The number of home owners opting to remortgage reached 36,620 in June, the most since February 2011.
It comes as the prospect of higher interest rates from the Bank of England becomes clearer. Banks are also engaged in a mortgage price war: Post Office Money is currently offering a two year fixed mortgage at 1.05 per cent, according to comparison site moneysupermarket.com, while HSBC grabbed headlines last year when it introduced its lowest ever two year mortgage rate of 0.99 per cent.
“There are signs consumers are now rushing to replace their existing deals and cut their repayments while they still can,” said Brian Murphy, head of lending at the Mortgage Advice Bureau (MAB).
“Despite the holiday season approaching, we are likely to see a burst of transactions continue into the second half of the year following Mark Carney’s comments about an early base rate rise, as more people look to secure a loan before the curtain comes down on the era of low-cost mortgages.”
In a further indication of how competitive the mortgage market has become, the total number of mortgage products surpassed 14,000 for the first time in over six years to reach a post recession high, according to the MAB.