October was the busiest month for mortgage applications since the start of the financial crisis, figures released by the Mortgage Advice Bureau (MAB) have found.
Activity in the market has increased by 22 per cent in the last month with lenders cutting rates and new products being made available.
The latest National Mortgage Index, compiled using data from more than 500 brokers and 800 estate agents, revealed that applications for purchase and remortgages are now 31 per cent higher than the start of the year and 2 per cent ahead of the same time in 2011.
Average fixed rates continue to fall, with two-year fixed rates down the most (0.09%) compared to September. As a consequence the percentage of purchase borrowers choosing fixed rates increased again to 86.8 per cent.
This marks another three-year high for fixed-rates on purchase business, drawing ever closer to their high of 91.5 per cent recorded in May 2009.
The increase in activity suggests the Government’s Funding for Lending Scheme (FLS) is now filtering through, enabling lenders to compete for business through lower rates and the launch of new products.
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“There’s been a surge in mortgage applications in the last month, especially for remortgages, and activity levels are at their highest since immediately prior to the financial crisis.
“The increase is partly seasonal, but has been boosted by the impact of the FLS. Average rates on two, three, and five year fixed rates have all come down, and the number of products offered has increased. As such applications for fixed rate deals continues to increase and are now almost 20% higher than this time last year, suggesting borrowers are looking to lock into these competitive rates to protect themselves against rate rises in the future.
“However, as yet the effects of the FLS have not translated into higher LTV lending, as banks have to set aside more capital for higher risk loans. For the market to return to full health we still need to see more being done for those at the lower end of the housing market.”
Loading ...