Remortgaging approvals rise amid ‘unusually high' housing market activity

Independent

29-07-2025

Remortgaging approvals reached their highest monthly total in more than two-and-a-half years in June, according to Bank of England figures.
Some 41,800 approvals (which only capture remortgaging with a different lender) were recorded in June.
This was the highest number since October 2022, when around 50,000 remortgaging approvals were recorded.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the rise is a sign 'that borrowers are keen to shop around for better deals even if it means the hassle of applying to another lender'.
Mortgage approvals for house purchase also ticked upwards, with around 64,200 approvals made to home buyers in June – the highest figure since March this year.
Many mortgage lenders have recently relaxed their rules to allow some borrowers to potentially take out bigger loans.
Richard Donnell, executive director at Zoopla, said: 'Demand for mortgages to buy homes increased in June as stable mortgage rates and changes to mortgage affordability encouraged more buyers to agree home purchases.
'Zoopla data shows unusually high levels of housing market activity for the early summer, with sales agreed up 8% on last year and 11% more buyers in the market.
'While activity levels are higher, this isn't feeding into house price inflation, which is slowing. We expect increased housing activity to support demand for mortgages in the rest of the year.'
Nathan Emerson, CEO of property professionals' body Propertymark, said: 'The Chancellor's recent Leeds Reforms sent a positive signal to the mortgage market, which should encourage many lenders to focus new products and services towards those on lower incomes to help them take their first step on to the housing ladder.'
Lucian Cook, head of residential research at Savills, said: 'Changes in the way mortgage regulations are being applied have the capacity to free up more mortgage lending among both first-time buyers and home movers, especially as we see further interest rate cuts.
'We anticipate that mortgaged buyer demand will pick up gradually, heading into early autumn. However, for momentum to truly build, households must feel more confident not only in their personal finances but also in the broader economic environment.'
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: 'In context, none of these moves are earth-shattering. Approvals for purchases came in at 64,200. Last year, approvals averaged 62,700 a month.
'So far this year, they are averaging 64,400. The year before the pandemic, the 12-month average was 66,700. It means this is a relatively steady set of figures.'
Looking at non-mortgage borrowing, the annual growth rate for consumer credit increased to 6.7% in June, from 6.5% in May.
Within this, the annual growth rate for credit card borrowing rose to 9.7%, from 9.3%.
Karim Haji, global and UK head of financial services at KPMG, said: 'The increase in consumer borrowing highlights that some households may still be relying on credit to manage day-to-day expenses. With the full impact of higher remortgage payments now being felt by many, financial strain remains a key concern.
'June's rise in mortgage approvals and remortgaging activity reflects growing borrower confidence amid increasing competition between lenders. Despite lingering cost-of-living pressures, more households are re-entering the market, either to secure better remortgage deals or take advantage of slightly improved affordability conditions.'
John Dentry, product owner at the Current Account Switch Service (Cass), said: 'While borrowing can be a useful money management tool, it's critical the associated risks are fully understood.'
Households' deposits with banks and building societies increased by £7.8 billion in June from May, following net increase of £4.3 billion in May from April. This was partly driven by households depositing an additional £3.6 billion into Isas.
Adam French, head of news at Moneyfactscompare.co.uk, said: 'The sharp rise in cash Isa deposits is a clear sign that rumours of Isa reform are influencing saver behaviour. With talk of slashing the annual cash Isa limit from £20,000 to £4,000, people have been rushing to use their allowances while they still can. It's a textbook example of policy speculation driving real-world financial decisions.
'After years of frozen tax allowances and rising interest rates pushing more savers into paying tax we're seeing a scramble for tax efficiency, and the prospect of that shield shrinking has understandably caused concern.'
Cash Isa limits were recently left untouched in Chancellor Rachel Reeves's Mansion House speech, although the Government is expected to continue talking to industry members and others about the options for reform, with a broad consensus that the UK's savings and investment culture needs to be encouraged.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: 'While June's uncertainty in the domestic and global economy may have encouraged some savers to top up their savings to protect their finances, others may have been trying to capitalise on higher savings rates while they were still around.'
In June, UK non-financial businesses repaid, on net, £2.5 billion of loans to banks and building societies, including overdrafts, compared with £8.6 billion of net borrowing in May, according to the Bank's report.
Within this measure, big non-financial businesses repaid, on net, £2.8 billion, compared to £8.3 billion of net borrowing in May. This was the highest net repayment from large businesses since June 2023.
The annual growth rate of borrowing by large businesses decreased to 6.7% in June, from 8.5% in May.
The annual growth rate of borrowing by SMEs (small and medium-sized enterprises) increased from minus 0.2% to 0.3% – swinging into the first month of positive growth since August 2021, when there was a 1.3% increase.