Data released by the CML revealed a strong bounce back in the take-up of fixed-rate lending in October - rising to 124,100 loans, from 109,100 in September. Fixed rates accounted for 62 per cent of all house purchase loans in October, compared to 59 per cent in the previous month.
The rise in the number of fixed-rate loans taken out in October probably reflects decisions by borrowers to take out fixed-rate deals before the interest rate rise in November, which was widely anticipated. The increase follows a period in which fixed rates had been becoming more expensive in relation to variable rates for a number of months ahead of November's rate rise.
October also saw an 13 per cent increase in the number of people remortgaging - rising to 100,000 loans from 88,000 in September. Remortgaging in October represented 36 per cent of all lending compared to 33 per cent in the previous month. The increase in remortgaging follows a marked decline in September, when remortgaging took the lowest share of gross lending for over four years.
This month the CML has also adjusted its figures for the third quarter of 2006 to provide a better estimate of regulated mortgage lending. This has resulted in a 9 per cent upward revision. However, total mortgage lending (including non-regulated such as buy-to-let and further advances) remains unaffected.
Michael Coogan, director-general at the CML, said: "The increase in fixed-rate loans during October reflects shrewd borrowing decisions by consumers, who were well aware that interest rates were expected to go up in November. It is encouraging that many borrowers are planning ahead financially and locking themselves into a period of certainty about their monthly mortgage repayments by taking out a fixed-rate product.
"This month's upward revision to our data for the third quarter of the year reflects some lenders not reporting to our survey that they had different lending patterns to the market norm. But this does not affect our previous comments about the state of the market, and we still expect it to remain in robust shape as we move into 2007."
