PS2bn increase sees biggest jump in borrowing in five years.
MORTGAGE borrowing recorded its biggest jump in five years last month as people rushed to put their money in bricks and mortar, high street banks have reported.
Figures from the British Bankers' Association (BBA) showed a PS2bn net increase in mortgage borrowing in August, marking the highest monthly rise since August 2010. The BBA said the number of mortgage approvals in August was 23% higher than a year ago, while re-mortgaging was up by 38% and stood at its highest level for four years.
With recent speculation about interest rate rises, and many attractive mortgage deals still on the market, "shrewd home owners" are looking to lock into fixed rates to control their mortgage costs, the report said.
Richard Woolhouse, chief economist at the BBA, said: "People are putting their money into bricks and mortar while interest rates are low and the timing of a likely rate rise remains uncertain. Mortgage borrowing continues to pick up. The August increase is the largest in five years, although borrowing is still some way below pre-crisis levels.
"Re-mortgaging numbers also continue to be strong, as shrewd home owners snap up competitive deals."
Explaining what is behind the competitive deals, Mark Harris, chief executive of mortgage broker SPF Private Clients, said the mortgage market is currently "over-supplied", with lenders having more money to lend than there are people looking for home loans.
He said lenders have to keep their rates low to pull borrowers in.