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UK mortgage lending hits 2yr high

Staff Reporter 4 minute read

Mortgage lending in the United Kingdom is at its highest level since December 2007.

New figures from the Council of Mortgage Lenders (CML) showed 55,000 mortgages were taken out for house purchases in October.

According to an article in UKNG, mortgage lending is now up 140 per cent from last year when only 23,000 loans were provided.

An increasing number of borrowers are also opting for variable rate products as demand for fixed rate mortgages continues to fall, settling at 66 per cent from their high point in July when 80 per cent of all new products were fixed.

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Some 21 per cent of all new mortgages are now tracker products, which have increased from the 12 per cent figure recorded in July thanks to widespread views among borrowers that rates are likely to remain frozen for a while.

Commenting on the data, CML director general Michael Coogan explained that the mortgage market is still two-pronged.

"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," Mr Coogan said.

"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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