Taylor Scott International News
Mortgage approvals for home buyers in the UK are improving with the latest figures from the Bank of England showing an 8.2% rise in the six months to August 2015. The number of loan approvals for house purchase was 71,030 in August, up from an average of 65,594 over the previous six months while approvals for remortgaging increased by 14.2%. Lending secured on dwellings increased by £3.4 billion in August compared to the average monthly increase of £2.4 billion over the previous six months. The three month annualised and 12 month growth rates were 2.9% and 2.1% respectively. David Whittaker, managing director of Mortgages for Business, pointed out that mortgage approvals as a whole are going from strength to strength but he warned that beneath this surface current, there are also deeper and more complicated flows. ‘There is an ongoing shift to different sorts of mortgage lending, and a booming remortgage market reflects that interest in new products. Even compared to extremely buoyant house purchase approvals, remortgaging has picked up more quickly, reflecting ongoing expectations of higher interest rates on the horizon, as well as a newfound love for the peace of mind of fixed rate deals,’ he said. ‘It isn’t boom times in every quarter though. Buy to let lending accounts for much of the trend to remortgaging specifically, and we are seeing strong interest from experienced landlords looking to take advantage of record low rates, even for fixed rate deals for five years or longer. But there is also a more muted tone to the buy to let industry now. Alongside an acceleration in overall mortgage lending, this could indicate a gradual correction in the proportion of mortgage lending to landlords,’ he added. He also explained that while buy to let lending accelerated through the first half of 2015 to reach nearly 20% of gross lending, it should now be time for that proportion to drop back again. ‘Fresh interest from the Government and Bank of England have not yet changed the fundamentals of the private rented sector or the long term business models of responsible and experienced landlords. But the real momentum may be turning back towards owner occupiers,’ he concluded. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, the mortgage market has moved on past the slowdown caused by regulatory changes, in particular the MMR regulations introduced in April 2014. ‘It is not just first time buyers who are benefiting from these calmer waters. Remortgaging activity has been making considerable headway recently, as existing home owners secure the best possible deals before an interest rate rise. In the purchase market, buoyant demand is being met with a dried up pool of available homes, and this imbalance will propel property prices on throughout the autumn,’ he said. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that August was the third consecutive month on month increase in house purchase loan approvals…. Taylor Scott International
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