Mortgage market “shrugs off” interest rise

Mortgage market “shrugs off” interest rise

Mortgage market activity during November remains buoyant, despite the recent increase in the base rate of interest.

Figures from UK Finance show there was a steady increase in lending for first-time buyers and home movers compared to October and 12 months earlier.

The month saw 34,800 new first-time buyer mortgages approved, with £5.6 billion of new lending reported - 16.7 per cent higher than in November 2016.

Data also revealed the average first-time buyer was aged 30 with an income of £40,000, while the average home mover is aged 39 and has an income of £54,000.

“The data shows housing market activity remains buoyant, despite November’s rise in the base rate. Steady increases in lending for house purchases together with increases in home owner remortgages reflect a keenness among consumers to benefit from still historically low interest rates, and a highly competitive marketplace,” explained Paul Smee, head of mortgages at UK Finance.

He added the slight fall in buy-to-let lending could be down to the recent regulatory and fiscal changes being faced by landlords, with some taking time to reassess their portfolios.

The Bank of England voted in November to increase the base rate of interest from 0.25 per cent to 0.5 per cent – the first rise in more than a decade.