The mortgage market has been recovering nicely for some time, and if recent figures from the British Bankers' Association are anything to go by, it's still surging ahead, with mortgage borrowing now at the highest level seen in seven years.
The figures show that the gross mortgage borrowing total for October stood at £12.9bn, which not only marks an increase of 26% on an annual basis, but is the highest monthly total recorded since August 2008.
Mortgage approval volumes also performed strongly, having recovered from September's slight dip, with the overall number of approvals granted during the month being 27% higher than a year ago. Remortgaging approvals noted the strongest rise of 34%, while approvals for house purchase were up 21% year-on-year (which means that all months so far this year have exceeded the corresponding month in 2014), and approvals for other means saw an impressive 41% boost.
The figures confirm that housing market activity remains strong, with the rise in borrowing having been "greatly helped by high competition in the mortgage market", said Charlotte Nelson, finance expert at Moneyfacts. "For instance, the average two-year fixed mortgage rate has dropped to 2.67%, the lowest on Moneyfacts.co.uk's records, [and] the average five-year fixed rate has also dropped significantly, falling from 3.96% a year ago to 3.29% today."
This level of competition has been fuelled by near-constant base rate speculation, she added, which has resulted in mortgage rates falling to record lows, "and borrowers are clearly taking advantage of these low rates to secure lower monthly repayments. Those who are still sitting on their standard variable rate (SVR) or who are coming to the end of a fixed mortgage deal need to act fast to secure a competitive rate while they still can."
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