The number of loans for house purchases in the UK reached 55,000 in October, the highest level recorded for almost two years.
It marks a welcome turn around from the beginning of 2009, with January seeing only 23,000 home loans. The figure of 55,000 is the highest number seen since December 2007.
The figures also show an annual improvement, with 43 per cent more loans in October 2009 than in the same month last year, the Council of Mortgage Lenders (CML) has revealed.
In total, the new loans for house purchase are worth £7.5 billion, including £2.2 billion worth of loans first time buyer loans.
Since July, the percentage of new loans for fixed rate deals has fallen from 80 per cent to 66 per cent. The CML said that borrowers are turning to tracker deals because there is an increasing expectation that interest rates will stay close to their current low for some time.
Lenders are also pricing their tracker mortgage at lower rates than their fixes, further adding to their appeal.
The remortgaging market is not faring as well, with figures showing that the number of loans in the sector have remained flat at 33,000 over the last two months. Apart from a total of 30,000 in August this year, remortgaging is at its lowest level since the CML began collecting the data in 2002.
"We are still in a two-speed mortgage market. 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," CML director general Michael 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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