Figures from the Bank of England showed a rise in the number of mortgages and remortgages taken out during February, indicating signs of growth in the housing market.
Figures of 61,760 approved mortgages showed an increase on the average of 60,750 approved over the past six months. There was also plenty of movement by borrowers in February, with 32,099 borrowers switching across to new lenders, an increase on the average of 31,687 over the past 6 months.
Strong competition between lenders has helped drive down costs for buyers, combined with the low likelihood of a rise in the interest rate during 2015, and experts predict mortgage lending will continue to increase.
For borrowers with a 25 per cent deposit, the average cost for a fixed rate mortgage, for two years, fell below 2 per cent. This is the lowest it has ever been, and for the five-year option, it has decreased closer to 3 per cent.
Brian Murphy, of the Mortgage Advice Bureau, said: “The combination of low inflation, moderating house price growth and a delay in the base rate seems to be working in consumers’ favour.
“Fierce competition between lenders is also a significant factor behind the rise in approval,” he added. “The emergence of more specialist lenders to compete with the high street brands means that, even with rigorous affordability checks in place, customers have more options than ever to explore getting a loan.”
The housing market slowed down after rule changes in April 2014, and home loan prices have been decreasing since the summer.