Mortgage lending went up in May despite the rising cost of living, with many people eager to secure a competitive interest rate on their mortgage.
There has been a rise in mortgage lending in the last eight months as borrowers rush to lock in low interest rates.
According to data from the Bank of England, net mortgage lending leapt up to £7.4bn in May, up from £4.2bn in April. This is despite rising interest rates and is above the 12-month pre-pandemic average up to February 2020 of £4.3bn.
Mortgage approvals increased slightly in May by 99 to 66,163. Mortgage experts said the performance of the market in May was steady despite economic challenges and uncertainty.
Many lenders are currently withdrawing their most competitive mortgage products on a weekly basis, often with very short notice. This has created a sense of urgency among buyers keen to lock in competitive rates.
Seek expert advice
However, our Managing Director, Monica Bradley, urges borrowers not to panic. ‘We’ve got used to low interest rates, so any rise can seem daunting,’ she says. ‘But it doesn’t have to be. In situations like this, expert advice is invaluable.’
Monica adds: ‘The beauty of speaking to an experienced mortgage broker – rather than talking directly to a lender – is that we will take a holistic view of your finances. We will look at your entire financial situation – not just your mortgage – but all of your costs. We will also consider where you want to be in the next five years and help you formulate a plan that works for you.’
Despite rising interest rates, increasing inflation and the increased cost of living, the property market is still faring well. Some economists have warned that the market will start to slow down, and one economist predicted a small 2% decline in house prices in the second half of 2022. There is a view that added pressure on disposable income, combined with low levels of consumer confidence means that home buyer numbers will start to dwindle in the second half of this year.
More buyers than properties
However, there are still more buyers than properties which is maintaining demand. One mortgage expert criticised ‘doom merchants’ who predicted the market would dip during the pandemic and said they were ‘badly wrong’.
It’s likely that there will continue to be a steady stream of remortgage applications as people are keen to explore longer-term fixed rates.
If you need advice on remortgaging, we’re here to help. Contact us today to talk to an experienced mortgage adviser. We’ll be glad to explain your options to you.