According to the data released, the number of mortgages approved by the main high street banks was 4.1% lower than last October, largely due to a 13.5% slump in remortgaging but offset by a 3.6% rise in purchase approvals.
Eric Leenders, managing director of personal dinance at UK Finance, said: “Overall mortgage lending grew in October, despite an uncertain economic environment, while house purchase mortgage approvals by the main high street banks were also up on the previous year.
However remortgaging activity has softened, following a period of strong growth driven by fixed rate loans reaching maturity and anticipation of August’s base rate rise."
Mike Scott, chief property analyst at Yopa, had this to say: "These figures show something of a turnaround in mortgage lending. For most of the year, the number of remortgages has been higher than at the same time in 2017, as people lock into low interest rates now in the expectation of impending base rate increases, while the number of mortgages for house purchase has been lower than last year.
But in October, the number of remortgage approvals was down by 13.5% on October 2017 while the number of mortgage approvals for house purchase was up by 3.6%. Remortgages have little effect on the wider housing market, so the increase in the number of house purchases is good news, and confirms similar figures for increasing house sales released earlier this month by HMRC.
The breakdown of these mortgages by type of buyer will not be available until next month, but we expect that the first-time buyer sector continues to perform well, with a recovery in the number of homemover mortgages but a continued downturn in the buy-to-let market driven by unfavourable tax changes.
The housing market is now beginning its annual Christmas slowdown in activity, but these figures suggest that we will have a strong start to next year as we move into the peak spring house-buying season."
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "It is encouraging news that mortgage approvals picked up in October compared with the same month last year, despite continuing uncertainty surrounding Brexit. Clearly those who need to get on with moving are doing so regardless.
Remortgaging dropped away a little but that is no surprise given the surge in activity in this part of the market until now.
Over the past six weeks, Swap rates have been trending downwards. The question is: will we see a lender fire sale as they target completions before year end as the cost of funding is cheaper? It could be a good time for borrowers to pick up an attractive mortgage deal as lenders compete more aggressively for business."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "When you drill down into these figures, the most important part is mortgage approvals for house purchase, which were 3.6 per cent higher than this time last year. This may be a little better than many expected but confirms what we have seen on the ground - that some sellers are taking a reality check and recognising that the difference between sale price and purchase price is much more important than the headline figure.
First-time buyers too are taking advantage of low mortgage rates, ample loan products and a slight easing of the affordability squeeze.
Brexit appears to be more of a pre-occupation for buyers in the southeast than the rest of the country where affordability seems to be more relevant."
