Home owners 'lock in' low mortgage rates

By John-Paul Ford Rojas, Business Reporter
A rise in re-mortgaging ahead of an expected interest rate rise next month helped boost the value of home loans to ?21.4bn last month.
Expectations of a rate hike in November - which have been boosted by better-than-expected economic growth figures - prompted home owners to lock in deals before borrowing costs go up.
That helped fuel the 5% increase in gross mortgage lending in September, compared to the same month last year, reported by trade association UK Finance."Competition amongst lenders, as well as near record low mortgage rates, has meant more and more home-owners are re-mortgaging and locking in deals," its monthly report said."If talk of the first rate rise in over ten years continues to gain momentum, we would expect to see growth continue in this part of the market."UK Finance also reported a return to growth in the home-mover market, partly thanks to the Bank of England's Prudential Regulation Authority (PRA) slightly easing rules designed to limit the scale of borrowing at high loan-to-income ratios.
Home owners 'lock in' low mortgage rates

The Bank of England is widely expected to hike interest rates next week
First-time buyers also contributed to the higher level of mortgage lending, continuing a trend seen so far in 2017.
Mohammad Jamei, UK Finance's senior economist, said: "Our data is showing that housing market activity has built up modest momentum since the start of the year, helped by an increase in first-time buyer numbers."Jeremy Duncombe, director of Legal & General Mortgage Club, said: "Lending has continued to grow year-on-year and despite referendums, Brexit and a general election, we are seeing robust levels of activity at a pace similar to that in 2016."Borrowers are clearly continuing to take advantage of a favourable, low rate environment by re-mortgaging ahead of a potential base rate rise."
Home owners 'lock in' low mortgage rates

Credit card lending rose by 7.8%
The UK Finance figures also showed credit card borrowing accelerate further, growing by 7.8% year-on-year in September - amid mounting concerns over consumer debt.The Bank of England has warned that lenders were underestimating the risks from this growth in debt, though its latest survey of consumer credit conditions suggested they were taking heed and preparing to rein in credit as the year draws to a close.The Bank is widely expected to increase interest rates from 0.25% to 0.5% next week - which would be the first hike since 2007.
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