Poll
Remortgage approvals rise as house purchases fall
Overall remortgage approvals between January and November 2016 were 13% higher that the equivalent period in 2015.
However, house purchase approval numbers fell by 9% in November compared with 2015, while the total for first 11 months of 2016 was 4% lower than the same period in 2015.
The BBA’s latest figures also found gross mortgage borrowing was £12.2bn in November 2016, 5% lower than 2015, while net mortgage borrowing was 2.4% higher than the previous year.
Consumer credit also fell during November to around 6% despite strong retail sales as growth continued to be supported – in the case of personal loans – by favourable interest rates.
Dr Rebecca Harding, chief economist at the BBA, felt that the reduction in interest rates in August may have boosted remortgage approvals as consumers looked to take advantage of the current economic conditions and lock-in at lower interest rates.
“A corollary of a low interest rate environment is a growth in deposits and we’ve seen personal deposits, in particular, grow more strongly in recent months as consumers hoard cash in the absence of higher-yielding, liquid investment opportunities.
“This growth in personal deposits may also suggest that consumers are looking to grow their cash reserves against potential economic uncertainties, such as an expectation of lower wage growth.”
The BBA revealed personal deposits had been growing more strongly in recent months and annual growth was 4.8% in November as they grew by £32.4bn during the first 11 months of 2016.
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