Mortgage markets showed increased activity in March 2019, according to new figures from the Bank of England. Households were estimated to have borrowed an extra £4.1 billion to be secured on property.
However, the Bank of England also noted that the number of mortgages that were approved actually fell by as much as 3,000 in March compared to the previous month, taking the total number of mortgage approvals down to 62,300 for the month.
Following the release of this data, the Bank of England announced its intention to keep interest rates stable.
No rate hike
The rise in mortgage activity was reported just before the Bank of England unveiled its quarterly Inflation Report for May 2019. The Bank’s Monetary Policy Committee (MPC) announced that it intended to keep interest rates at 0.75 per cent, where it has remained since late 2018.
The MPC announced in the May Inflation Report that they had based their economic forecast on the assumption that there would be a “smooth adjustment” regarding the UK’s eventual trading relationship with the EU.
The report also said: “The MPC has noted previously that UK data could be unusually volatile in the near term, due to shifting expectations in financial markets and among households and businesses.
“The Committee continues to judge that, were the economy to develop broadly in-line with its inflation report projections, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2 per cent target at a conventional horizon.”
It concluded: “The economic outlook will continue to depend significantly on the nature and timing of EU withdrawal…The monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction.”
Remortgaging picked up
As well as mortgage rates, remortgaging also showed signs of picking up as the Bank of England estimated that approvals for remortgaging had grown by 2,000 since February, reaching 49,700 cases in March 2019, as homeowners took advantage of low interest rates.
This follows a recent report that suggests borrowers are more likely to remortgage by late 2019, according to research by comparison group Moneyfacts. This report revealed that rising interest rates since 2017 have also caused mortgage rates to rise, meaning borrowers now face higher mortgage bills if they find themselves seeking new mortgage terms in 2019, compared to previous years.