October mortgage lending was stronger than in the previous month and during the same month last year.  According to data released by the Council of Mortgage Lenders (CML), October mortgage lending amounted to £19 billion which was a 5% increase over September.  In a comparison with October 2013 there was an 8% increase.

Mohammad Jamei, CML economist, noted that mortgage lending was steady and should continue to show demand through the rest of the year, but perhaps not as strongly as it was months ago.  He said, “As the temporary impact of implementing the mortgage market review fades, a clearer picture of the mortgage and housing market is emerging. Nearly all indicators in the housing market align with our view of a gentle easing in market conditions.”

Remortgage lending demand is expected to grow early in the next year as the Bank of England draws nearer to increasing the standard base interest rate.  Experts have put homeowners on alert to prepare now so they are not caught unaware when their interest rate begins to climb.  A recent survey showed that many households would find it financially difficult to handle a 2% increase in their mortgage interest rate. 

Those that have had their current mortgage deal end and have not remortgaged have been moved onto their lender’s standard variable rate (SVR).  This interest rate is risky for those that do not have household budgets that can easily sustain a quick increase to the monthly mortgage repayments.  While a lender’s current SVR may be low and affordable, that could change quickly when lenders begin to ease their rates upward.  Most will change their SVR before the Bank changes theirs.  Therefore, those that are seeking a remortgage should consider one soon while rates remain so cheap.  The competitiveness between lenders while demand is low for a remortgage is producing low interest rate remortgage offers.  The trend won’t last forever and those that take advantage of the current rates could find the savings substantial when compared to offerings that will be on the market early of next year.