As homeowners brace themselves for higher interest rates, remortgaging in the UK is at its highest level in almost 26-months, new figures have revealed.
According to the Bank of England, in February, 35,725 loans were approved for people switching to a new mortgage deal, the highest level since December 2008.
The figures follow expectations that, due to high inflation, the Bank of England will increase the base rate from its current record low of 0.5%. As a result, people who had been sitting on their lenders' standard variable rate are remortgaging before rates start to rise.
However, despite the increase in remortgaging, there was also a slight increase in the number of mortgages approved for house purchase earlier this year. In February, 46,967 mortgages were approved, marking the highest level since November last year, but still significantly below the 70,000 to 80,000 approvals a month that are thought to be consistent with a stable housing market.
"Despite the modest pick up in mortgage approvals reported by the Bank of England in February, the housing market clearly is still very weak which does not bode well for house prices,” commented Howard Archer, Chief UK and European Economist at IHS Global Insight.
"We suspect that house prices will fall by around 5% in 2011 and end up losing around 10% from the peak levels seen in the first half of 2010."
If you’re remortgaging or if you’re a first time buyer, making sure you get the right advice before entering the UK’s still unpredictable housing market is essential. Contact us today and we’ll do all we can to help,