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The number of loans for house purchases in the UK reached 55,000 in October, its highest
level since December 2007, according to new data released by the Council of Mortgage Lenders
(CML).
The amount of buyers has risen from a trough in January 2009, when only 23,000 loans were
advanced. It is now up 140% from that low point.
However, this pattern of increase is not repeated with loans for remortgaging which have stayed
static for two months at 33,000. Apart from a total of 30,000 in August 2009, remortgaging is at
its lowest level since we began this run of data in 2002.
Fixed mortgages are continuing their downward trend from a high in July, when 80% of all new loans
taken out were fixed. In October, this had decreased by 14% to 66%. Tracker mortgages, however, are
on the rise with 21% of all new loans being trackers, compared to July's low of 12%.
Borrowers are turning to trackers mainly because they now have greater expectation that interest
rates will stay at, or near, their current low for a while to come. That, coupled with lenders
pricing their trackers at lower rates than their fixes, makes trackers very appealing to those able
to meet the criteria necessary to take advantage of them.
Commenting on the data, CML Director General Michael Coogan said: "We are still in a two-speed
mortgage market. It appears that low interest rates for those with substantial deposits, coupled
with this year’s sustained increases in house prices, are encouraging more people to buy or move
home.
"But the same low interest rates that are driving house purchase activity provide little incentive
for borrowers to refinance their loans. This, coupled with ongoing tightness in lending criteria,
continues to hold back the remortgage market."
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