Mortgage Lending Grows in October

Mortgage lending grew by 5% in October according to the Council of Mortgage Lenders (CML). The increase to an estimated £13.5 billion, is a common seasonal change, but is encouraging all the same. The October estimate is still well down on the £18.5 billion lent in October 2008.

The CML expects comparisons to improve in the coming months as mortgage lending dropped dramatically in the latter part of 2008 and early 2009, but their forecast on total lending for the year remains at around £141 billion.

Other statistics released this week show the average two year fixed rate mortgage is 4.99% its lowest level since June. Traditionally the most popular fixed rate term, the fall in 2 year deals has not been mirrored over 3 and 5 years, where the average rate has risen.

While there will always be a demand for the security of a fixed rate, more borrowers are now opting for variable tracker deals, as most interest rate forecasts expect bank rate to remain low for some time.

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