Mortgage lenders have reported their strongest September since 2007 as borrowers snap up low rate deals.
The Council of Mortgage Lenders (CML) said an estimated £20.5 billion-worth of home loans were handed out in September, marking the highest figure for the month of September since 2007 when lending reached £29.9 billion.
However, lending was down by 7% compared with August, when mortgages totalling £22.1 billion were advanced to borrowers.
Many mortgage lenders have been offering their lowest ever rates and the recent cut in the Bank of England base rate to 0.25% has made some borrowers’ deals even cheaper.
CML senior economist Mohammad Jamei pointed to a recent survey from the Royal Institution of Chartered Surveyors (RICS), which showed new buyer enquiries had started to increase for the first time since February this year.
He said: “Remortgage activity looks set to grow, helped by attractively priced mortgage deals encouraging borrowers to refinance.”
But he said prospects for activity among home buyers look “slightly subdued, when compared to the same period a year ago”.
He continued: “Despite this, housing market sentiment continued to improve in September, after recovering in August. As a result, we expect a modest rise in approvals, though at levels lower than seen earlier this year, as the lack of properties on the market for sale and affordability constraints continue to bear down on borrowers.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said despite uncertainty following the EU referendum, September had been a busy month for the mortgage industry.
He said: “Remortgaging numbers are exceptionally strong, with many searching for the certainty of a fixed rate in what are pretty uncertain times.
“We are also seeing borrowers prefer to release some equity at the same time to extend and improve rather than moving and having to pay much higher transactional costs.”