Mortgage and remortgage approvals have seen new highs and lows this month after industry pressures and the new budget take hold of the market.
Remortgage approval rates have rocketed ahead of Novembers interest rate hike, jumping to a nine-year high position after driving the stability of the market in October.
Recorded by the Bank of England, a total of 51,593 remortgages were accepted in October, the highest since 2008.
Interest rates were raised from their historic low of 0.25 percent to 0.5 percent on November 2nd in a widely anticipated move that increased costs for variable rate mortgage holders. In contrast to the rise in interest rates, the number of mortgages being approved for house purchases have fallen to a 13-month low of 64,575 in October.
While Mortgages have taken a big blow from the new budget, many homeowners and first-time buyers are already beginning to see the increased strain of getting on the property ladder; waiting to see how the £44 billion investment in capital funding will affect the prosperity of securing one of the 300,000 new homes promised by the government.
Interestingly, while mortgages have taken a plummet, many other forms of financial support have grown, with consumer credit, which includes credit cards, personal loans and overdrafts, showing an annual growth of 9.6 percent.
Mark Harris, head of the mortgage broker SPF Private Clients, said: ‘Mortgage rates continue to be competitive despite the base rate rise earlier this month.’
With Howard Archer, chief economic adviser at EY ITEM Club, further expressing that it remained to be seen if the interest rate would ‘have a dampening impact on consumer borrowing’.
Archer further added: ‘There are clear signs that lenders are markedly reining in the amount of unsecured credit available to consumers and also tightening their lending standards.’
With interest rates rising, mortgage acceptance rates retracting, and a very confused housing market, auction may be the suitable solution for peoples mortgage woes. With auction prices meeting in the middle as a compromise between buyers and sellers, a smaller mortgage may be required and might be the difference between being accepted and rejected.
If you’re interested in a quick and reliable solution to buying and selling a property, contact IAM Sold today and we’ll help make that new years move a little less stressful.