Remortgage lending is making a comeback with the number of approvals up year-on-year for the third consecutive month.
Data from the Bank of England, published this morning, shows there were 36,003 loans approved for remortgage in May, a 26.5 per cent increase on the 28,455 loans approved in May 2014.
Mortgage Advice Bureau head of lending Brian Murphy says: “Today’s figures show that the remortgage market has sprung into life over the last year. Remortgaging accounted for almost one in three loans approved last month as more people were given the go-ahead to switch than at any point since January 2014.
“Low rates and rising house prices are giving many homeowners a stronger incentive to switch their loan than they have had for years.”
House purchase approvals were up 3.8 per cent year-on-year, from 62,076 to 64,434, while approvals for further advances were up 23 per cent, from 8,693 to 10,693.
In total, 111,130 loans were approved last month, an increase of 11.9 per cent on the 99,224 loans approved the previous May.
While approvals were up, gross lending fell 0.59 per cent to £16.6bn.
In the first five months of the year £83.2bn has been lent to borrowers, down 3.9 per cent on the £86.6bn lent in the first five months of last year.
GPS Economics director Gary Styles says: “The latest mortgage approvals for May are lower than expected with house purchase approvals falling by 4.7 per cent in the month. However, due to a strong performance in April overall volumes remain 3.8 per cent higher year on year.
“Based on the figures for the first five months of the year, total gross mortgage lending still looks on track to be around £200bn in 2015.”