Mortgage lending increased in the month of October by 8% over September according to the Council of Mortgage Lenders (CML). There was also an increase in the year to year comparison of 19%. The level of gross lending for October is the highest since July 2008 reports CML.

Homeowners are keen to secure a low fixed interest rate and are still showing strong demand for remortgages. Home buyers, too, are trying to secure low interest rates while also avoiding rising house prices. While the holidays are expected to show lower demand for mortgage lending it will not be because rates are rising but rather due to borrowers being sidelined by holidays, inclement weather, and due to fewer business days for lenders. After the New Year, the demand is expected to pick up and be in line with the same levels prior to the holidays.

Home owners and home buyers are driven to secure low interest rates, but also playing in their favor is strong consumer confidence, low inflation, wage growth, and the competitive environment in which lenders are currently operating.

“As lending in the regulated mortgage space picked up over the summer months, the pace of recovery has improved,” said Bob Pannell, CML chief economist.

He added, “This looks set to continue over the closing months of the year with the factors helping support this recovery continuing to be low inflation, strong wage growth, an improving labour market and competitive mortgage deals.

“As a result lending this year is likely to exceed our forecast of £209 billion, though affordability pressures will limit business volumes for first-time buyers and movers meaning that we think the market has only modest further upside potential over the short-term.”