First-time buyers saw a large month-on-month increase in activity in June compared to May, but little change when compared to June 2014, according to the Council of Mortgage Lenders (CML).
Home mover lending also saw substantial monthly increases and slight yearly increases in volume and value. Meanwhile, home-owner remortgage activity increased by over a third month-on-month and year-on-year.
Buy-to-let continues to grow year-on-year and month-on-month, mainly driven by buy-to-let remortgage activity.
During the second quarter of 2015, first-time buyers increased in number and amount advanced by over 20% but there was a year-on-year decline in lending when compared to the same quarter in 2014. Home mover lending saw similar quarter-on-quarter increase but year-on-year decline.
Over the period, home-owner remortgage activity rebounded to higher volume and value compared to the first quarter of the year and the second quarter of 2014.
Buy-to-let has increased compared to the second quarter last year in both volume and value. This was mainly driven by remortgage activity.
Paul Smee, director general of the CML, said: “Notable this month is the uptick in remortgage activity among home-owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates. It is likely that people are now beginning to feel a rate rise is a realistic prospect, and not just a distant theoretical possibility.
“After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts.”
Simon McCulloch, director at comparethemarket.com, said: “As talks of a rate rise have intensified we have seen a 23% spike in re-mortgage queries on our site from June to July 2015. The indicates that the impact of a rate rise is registering with consumers, who are exploring ways to manage their finances with the actions of the Bank of England in mind. Banks and building societies were offering mortgage interest rates at some of their lowest ever levels in June and July, but we have already seen a number of providers withdraw their best offers in anticipation of a rate rise, so people are looking at mortgaging now.
“When re-mortgaging, consumers should also consider the impact of arrangement fees as many of the products with the lowest rates have very high fees of £1,500 and over. This is fine for people with larger mortgages balances, who should be able to claw back the fees with high monthly savings when rates rise, but for those with smaller mortgages, a slightly higher fixed rate product with lower/zero arrangement fee might be a better option. The overall cost of the mortgage should make clear how it compares.”