Its national mortgage index showed mortgage application activity rocketed up by 22% last month as lenders continued to cut rates and increase product availability.
The percentage of purchase borrowers choosing fixed rates increased to 86.8%, marking a three-year high for fixed-rates on purchase business.
MAB said the increase in activity suggests the government’s Funding for Lending Scheme (FLS) is now filtering through, enabling lenders to compete for business through lower rates and the launch of new products.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The increase is partly seasonal, but has been boosted by the impact of the FLS. Average rates on two, three, and five-year fixed rates have all come down, and the number of products offered has increased.
“As such applications for fixed rate deals continues to increase and are now almost 20% higher than this time last year, suggesting borrowers are looking to lock into these competitive rates to protect themselves against rate rises in the future.”
Murphy added that the effects of the FLS have not yet translated into higher LTV lending, as banks set aside more capital for higher risk loans.
“For the market to return to full health we still need to see more being done for those at the lower end of the housing market.”
Broker Conveyancer also reported a doubling of activity levels between September and October.
Harpal Singh, managing director of Broker Conveyancing, said: “Without doubt the summer of 2012 was nothing to write home about. However since the start of September, and particularly during October, both purchase and remortgage levels have seen a considerable increase. There are many reasons for this including a far more competitive remortgage market at low LTV levels, a push on from the summer lull and a more concerted effort by some brokers to be as active as possible in the conveyancing sector.”
