Remortgages hit nine-year high to beat interest rise

REMORTGAGE approval rates jumped to a nine-year high just before the Bank of England raised interest rates, official figures show. Some 51,593 were re

REMORTGAGE approval rates jumped to a nine-year high just before the Bank of England raised interest rates, official figures show.

Some 51,593 were recorded by the Bank in October, the highest since that month in 2008.

Interest rates were raised from their historic low of 0.25 per cent to 0.5 per cent on November 2 in a widely anticipated move that increased costs for variable rate mortgage holders.

The number of mortgages being approved for house purchases fell to a 13-month low of 64,575 last month, the Bank’s figures also show.

Meanwhile, consumer credit, which includes borrowing using credit cards, personal loans and overdrafts, showed annual growth of 9.6 per cent last month, edging down from 9.8 per cent in September and ten per cent in August.

Mark Harris, head of mortgage broker SPF Private Clients, said: ‘Mortgage rates continue to be competitive despite the base rate rise earlier this month.’

But Howard Archer, chief economic adviser at EY ITEM Club, said it remained to be seen if the interest rate would ‘have a dampening impact on consumer borrowing’.

He added: ‘There are clear signs that lenders are markedly reining in the amount of unsecured credit available to consumers and also tightening their lending standards.’

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