Britain’s banks lent more money through mortgages in October than at any point since the summer of 2008, figures show, as low interest rates and rising incomes tempted more people into the market.
Gross mortgage lending hit £12.9bn during the month, 26% higher than in October 2014 and the highest figure since August 2008, according to the latest data from the British Bankers’ Association (BBA).
Mortgage lending for house purchases slowed in the latter half of 2014, but has been growing again this year, and in October there were 45,437 approvals – 21% more than in the same month last year.
Remortgaging was up by 34% year on year, at 24,275 approvals.
The BBA said the average value of mortgages approved for house purchases was £175,600, while remortgagers typically borrowed £172,800.
Recent months have seen a price war among mortgage lenders, which has led to some of the cheapest deals on record. Borrowers looking to fix their mortgage for five years can pay as little as 2.14%, while those fixing for two years can get a rate as low as 1.15%.
Richard Woolhouse, chief economist at the BBA, said: “These statistics show that housing market activity remained strong in October, with gross mortgage borrowing 26% higher than a year ago and at its highest level for seven years.
