Activity increased in January with the market making a strong start to the year, the Bank of England’s Money and Credit report has found.
Activity increased in January with the market making a strong start to the year, the Bank of England’s Money and Credit report has found.
In the first month of the year there was a 2.74% increase in activity from December 2015 with 128,709 transactions.
The increase was fueled bya 4.56% increase in house purchase transactions and a 1.21% increase in remortgage transactions.
Stephen Smith, director of Legal & General Housing Partnerships, said: “It is clear to see that demand for homeownership is still rising in what looks to be a strong start to 2016.
“Remortgaging has also seen a relative increase for the second month in a row, with more homeowners taking advantage of the competitive deals currently on offer.
“We expect to see these figures continue to climb as many potential second home owners and landlords hurry to complete before the stamp duty changes are implemented in April.”
House purchase activity was strong in January compared to last year, as transactions stood 6.21% higher than was typical in the previous six months.
Lending values stood at £21.3bn in January with repayments reaching £17.7bn.
Peter Williams, executive director of IMLA, was pleased with the state of remortgage activity.
He said: “The value of remortgaging rose 45% over the previous year, despite the growing speculation that a base rate rise will be pushed back as far as 2019.
“The threat of a rate rise is no longer driving the remortgaging uplift – instead it is being supported by homeowners looking to improve their financial situation through cheaper monthly repayments. In particular, landlords are preparing for fewer tax reliefs – like the loss of the wear and tear allowance and restriction of mortgage interest deductability.
“Accessing cheaper deals through remortgaging will help offset these when they come into place. With rising homeowner equity and a range of competitive deals in the market, homeowners have also been determined to capitalise on currently low rates and intense market competition amongst lenders.
“The stability in lenders’ mortgage funding continues to improve. While the government and the Bank of England have supported funding the market, an increase in retail deposits over mortgage balances is underpinning improved mortgage lending, with the savings inflow exceeding that lending by £215bn or 17% in the last quarter of 2015.”
