Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“The volume of monthly mortgage lending shot up in October to reach the second highest value since 2007, with homebuyers continuing to benefit from the tempting rates available on the market. Existing homeowners also recognised the advantages of swapping to a new deal, with the value of remortgage loans hitting highs not seen since January 2009. October’s upsurge sets the scene for a healthy end to mortgage activity in 2015 despite the slow start to the year.
“Mortgage product numbers reached a post-recession high in October*, giving consumers wider product choice and the confidence to secure a great deal. Lenders are also increasingly willing to lend, and are vying for borrowers’ custom with attractive rates. ONS data out today shows year-on-year house price growth of over 7 per cent**, putting existing homeowners at an advantage as they are able to leverage increased housing equity against their mortgage deal.
“However, rising house prices are likely to cause affordability concerns for first-time buyers, compounded by the shortage of housing supply. The government’s focus on shared ownership and the creation of Starter Homes are a step in the right direction, but need the backing of lenders to be successful. Creative solutions to address affordability concerns are needed to ensure lower income buyers aren’t priced out of the market altogether.”