BBA: Mortgage approvals leap as buyers race interest rate hike
The number of mortgage approvals leaped 24 per cent in the year to September, figures published this morning showed, suggesting buyers are racing to secure mortgages before interest rates are hiked.
The figures, by the British Bankers' Association, showed gross mortgage borrowing in September rose to £12.1bn, 17 per cent higher than a year ago.
The number of remortgages rose 40 per cent, while mortgages for hours purchase rose 14 per cent – although that growth was still higher than a year ago.
"Mortgage rates are still close to record lows, banks are becoming more willing to lend and consumer confidence is still high by past standards," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
"Meanwhile, the macroprudential safeguards introduced by the Financial Policy Committee in June 2014, which limit the number of mortgages banks can underwrite at a loan-to-income ratio of more than 4.5 times to 15 per cent of all new loans, are still not close to biting.
"With surveys continuing to indicate a dearth of new homes for sale, this recovery is likely to increase the upward pressure on house prices, which we expect to increase by about eight per cent next year."