Expected interest rate rise saw remortgage demand significantly increase in October.
October saw a continuation of the mixed outlook noted in September, with some regions, such as Yorks and Humber, the North West and West Midlands, seeing prices still increase both month on month and year on year, yet the continued abating of values of other areas, most notably London and the South East.
Overall, last months’ headline data showed very little change from the previous month, however we would suggest that the better performing regions are smoothing out the overall picture where pricing is cooling slightly in some areas. With this in mind, we observed marginal monthly movements on key indicators, including:
– Average purchase price in October 17 0.4% higher than September 17
– Average remortgage loan size rose in October 17 to £176,186, a 1.1% increase on the previous month
– Average first time buyer purchase price increased in October 17 to £214,132, a rise of 2.6% on the previous month
Mortgage Advice Bureau data is based upon mortgage applications therefore this provides a reliable bellwether in terms of consumer activity.
Amid a backdrop of better than expected GDP results, together with inflation returning at over the BOE target, market sentiment in October was very much that an interest rate rise was signposted, and it would be surprising if a 25 basis points increase hadn’t been applied at the beginning of November, which did indeed turn out to be the case when the Bank of England made the announcement on 2nd of the month. Consumers also saw the rate increase as highly likely, which created exceptionally strong demand for remortgage and product transfer assistance throughout the network.
