55,300 mortgages were granted to home buyers in October 2009 – the highest number since December 2007.
New data from the Council of Mortgage Lenders (CML) shows that approvals in October were up 9% on the previous month, and had increased by 43% since October 2008.
According to the CML, the number of people buying properties has almost doubled from its low point in January 2009, when only 23,000 mortgages were advanced.
Remortgage levels lower
However, the number of people remortgaging remained static throughout September and October 2009. In each month, the CML says, 33,000 people applied to remortgage their homes.
Remortgage levels were down 52% year-on-year in October, and remain historically very low.
Commenting on the data, CML director Michael Coogan said: ‘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.’
Fixed rate and tracker mortgages
The CML’s data also shows that are increasing in popularity, while the number of being taken out has decreased.
In July 2009, 80% of all new mortgage loans were fixed rate deals, but this had fallen to 66% in October.
Meanwhile, tracker deals accounted for 21% of the mortgages approved in October – up from 17% in September and a low of 12% in July. This is largely down to the widespread expectation that interest rates will stay at, or near, their current level for some time to come, the CML suggests.
Finding the best mortgage for you
If you’re on the hunt for a new mortgage, remember that it’s vital to compare the true cost of any deals you are considering. This means taking into account additional charges, such as arrangement and valuation fees, that you may have to pay as well as the headline interest rate.
Meanwhile, if you’re confused about which type of mortgage is right for your circumstances, make sure you read our and guides.
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