Borrowing Hits Highest Levels in Almost a Decade

Remortgage lending exceeded all of other types….

According to figures release by the Bank of England, households in the UK are borrowing at the greatest rate since 2008.

Analysis show new mortgage lending in the three months to September stood at 81 billion – an increase of 14% year-on-year.

The growth was driven by a race to beat November’s interest rate rise, when the cost of borrowing surged for the first time in a decade, from a rate of 0.25% to 0.5%, particularly among people remortgaging their homes in order to lock in cheap deals.

Despite the government introducing incentives to first-time buyers (FTB), such as the Help-to-Buy scheme, demand for financial products from this group fell in the three months to September.

The number of mortgages extended to FTB dropped over this period, in fact, with their share of lending of the overall market slipping one percentage point to 21%.

Figures also revealed a fall in buy-to-let mortgages, currently at the lowest level seen since 2013, following measures to curb this type of lending launched by the government in recent years, including rises to stamp duty.