Mortgage borrowing grew to its strongest level in seven years in October as consumers rushed to snap up cheap deals, banks have reported.
The British Bankers’ Association (BBA) said gross mortgage borrowing reached £12.9 billion last month - marking a 26 per cent increase on the same period a year ago and the highest figure since August 2008.
Some 45,437 mortgages were approved for house purchase in October with a total value of £8.1bn, representing a 21 per cent increase compared with October last year.
There were 24,275 approvals for remortgaging, collectively worth £4.2bn, marking a 34 per cent jump on October last year.
BBA chief economist Richard Woolhouse said: “Mortgage rates are at multi-year lows and people are snapping up the very competitive deals being offered by banks.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said lenders are particularly keen to offer cheap deals at the moment to meet their end-of-year targets, adding that, for many, stricter lending rules which have come into force in recent years are still a barrier to getting a mortgage.
“Mortgage approvals are rising but far from racing away while growth is more moderate and therefore more sustainable than in the past.”
The BBA’s report said that over the past year, net borrowing using personal loans has been rising at an annual rate of around five per cent.
The report said: “Increased demand for personal loans continues to reflect better credit availability, lower interest rates on personal loans and stronger household finances.”