The latest figures issued from the Council of Mortgage Lenders (CML) have shown that the number of mortgages taken out for home purchases reached its highest level for nearly two years in October, according to a report from Times Online.
The housing market rally continued as 55,000 mortgages were taken out in the month ? 9 per cent higher than September, and more than twice the low number of 23,000 in January this year. It appears that low interest rates for those with sufficient funds for a deposit, plus the pick-up in the housing market, have encouraged people to return to the market.
The number of loans for remortgages and first-time buyers was actually unchanged from September to October, but there was a 15 per cent rise in the number of loans to home movers, most of whom chose tracker mortgages to take advantage of the anticipated low base rate for many months to come.
Director-general of the Council of Mortgage Lenders, 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.?
?But the same low rates that are driving house price activity provide little incentive for borrowers to refinance their loans. This, coupled with tightness in lending criteria, continues to hold back the remortgage market.?
Despite the increase in demand, housebuilders have not yet increased their construction rates. Recent figures show that there was a 1 per cent fall in private housing order in the period August to October compared with the same period last year. However, there has been a 10 per cent increase in construction of social housing in the same period, with the Government having pushed for more affordable housing.
