Gross mortgage borrowing of £13.6 billion in January was 38% higher than a year ago and the highest since mid-2008, the British Bankers’ Association (BBA) has revealed.
The number of mortgage approvals in January was 33% higher than a year ago, with remortgaging up 42% and house purchase up 27%.
Borrowing by non-financial companies increased fairly strongly in January, after declining in December, particularly in the transport, storage and communication and construction sectors.
Richard Woolhouse, chief economist at the BBA, said: “The start of the year has seen a significant rise in mortgage borrowing. It seems that this has been driven, in part, by borrowers looking to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect in April.
“Net lending to non-financial companies saw the biggest monthly jump since July 2008 as businesses take advantage of record low interest rates. Demand from the transport, storage and communication and construction sectors was particularly strong.”
“It is good to see such a significant year-on-year rise in lending as more people look to invest in a property,” said Adrian Whittaker, sales director of New Street Mortgages.
“However, with rising competition for a limited supply of housing borrowers and brokers need to be certain of a lender that can process a mortgage as swiftly as possible.
“Mortgage lenders need to be sure that the lending process does not become the bottleneck for consumers as they compete with other buyers to secure a property. It is crucial that as an industry we support brokers in this race, updating our propositions with the latest technology and digitising documents to give intermediaries the surety and speed they want when it comes to finding their client the right mortgage.
“Those that fail to adapt to digital will find their businesses disrupted by lenders that have embraced technology to streamline the mortgage application.”