Monthly lending has never been this high in any month since the BBA started collecting data back in 1997, when monthly credit card borrowing was just £3.8bn. Remortgaging accounted for 25,540 approved home loans, a 38% rise compared with August 2014 and the highest level for four years.
Not only that, but mortgage approval volumes are also witnessing considerable improvement, with the overall number of approvals in August being 23% higher than a year ago.
“So despite fears of an interest rate rise next year, there is still some excellent pricing on fixed rates, with five-year deals available at less than 2.5 per cent. Such deals are boosting the popularity of remortgaging and we expect this to continue during the autumn”.
One member of the Bank of England’s nine-strong monetary policy committee voted to raise interest rates in September’s meeting of the rate-setting body, and uncertainty over the strength of the world economy could make the Bank hesitate further.
Mr Harris also argued that for many, the main issue is not so much finding a cheap mortgage rate, but being able to prove affordability to satisfy the lender and meet tighter criteria post Mortgage Market Review.
The BBA figures also show that demand for personal loans has been rising and has expanded over the past two years.
Credit card borrowing also shot up, with consumers borrowing £9.4bn on plastic, roughly in line with lending figures in each month since April. “Base rate speculation is rife at the moment, but by opting for a low fixed rate deal, particularly over the longer term, borrowers can buffer themselves against any rate rises in the near-future”.