Re-mortgage deals up 16% amid 'historically low interest rates'
Home-owners are continuing to snap up re-mortgage deals with ultra-low rates, with the number of loans approved in January surging by nearly 16% year-on-year, according to a high street banking report.
The British Bankers' Association (BBA) said 28,862 re-mortgaging approvals were recorded last month, marking a 15.7% increase compared with January last year.
The number of mortgage approvals being made to home-buyers was down compared with a year earlier, with 44,657 approvals for this purpose last month, a 2.5% fall compared with January last year.
But the number of mortgage approvals for house purchase was up slightly in January when compared with the previous month, with 43,581 approvals made in December last year.
Eric Leenders, the BBA's managing director for retail banking, said: "The new year saw home-owners make the most of historically low interest rates by taking advantage of competitive re-mortgage offers. Nearly 29,000 of these deals were approved last month - 16% higher than January last year."
Looking at other types of household borrowing, the BBA said consumer credit, which includes borrowing through overdrafts, personal loans and credit cards, grew by 6.7% annually in January.
The BBA said growth in consumer credit continues to be primarily driven by personal loans.
The figures also showed that lending to non-financial businesses showed a net increase of £3.4 billion in January, following a £2.8 billion decrease in December.
Howard Archer, an economist at IHS Markit, said: "On the face of it, the rise in business borrowing in January looks encouraging for economic activity."
But he continued: "The suspicion is that businesses will become increasingly cautious in their behaviour over the coming months due to mounting concerns and uncertainty over the economic outlook as the UK's Brexit process gets under way and consumer spending falters."