Mortgage lending has grown significantly in recent months, with fixed-rate deals gaining in popularity, according to the Council of Mortgage Lenders (CML).

Latest figures from the body show that there were 52,000 loans for house purchase in June, worth a total of £7.6 billion. That’s 23% more, in terms of value, than in May – and an increase of 27% on June last year. Remortgaging also increased modestly, but remains significantly down when compared with a year ago.

Fixed-rate mortgages are once again attracting attention, with borrowers taking advantage of falling interest rates. 48% of new borrowers took out a fixed-rate deal in June, the largest proportion so far this year. The perception that interest rates might rise in the not too distant future is also thought to have been a factor in the increase.

There were also positive signs for the buy-to-let market in latest quarterly figures. The market remains “very subdued” according to the CML, but there was an increase in April-June of 15% on the same period last year, with a total of 24,900 loans for buy-to-let properties. Of the £2.4 billion advanced, £1 billion was in remortgages.

However, CML economist Paul Samter gave a cautious assessment of the mortgage market as a whole. He pointed out that the government’s austerity measures had yet to bite, and forecast “muted” house-purchase activity. “Both consumer demand and lending capacity remain distinctly difficult to call,” he admitted.

Tags: Economy, Housing Market, Mortgage Rates

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