The number of new mortgages for house purchases is at its highest since the recession began.

The number of mortgages for house purchases reached its highest figure since December 2007 in October, according to the latest figures from the Council or Mortgage Lenders (CML).

In the UK, the number of loans for house purchases was 55,300, up 9% in October compared to the previous month, and up 43% compared to the same time last year.

However, the type of mortgage favoured by house buyers has changed. The latest figures reveal a consistent trend away from fixed-rate mortgages – October’s figure was 4% lower than September – and instead people are looking to tracker loans.  Lenders are offering variable rates at a much better rate than their fixed rate loans in line with the low Bank of England (BoE) base rate.

Some of the lowest fixed rate loans currently offer a rate around 3.64% (HSBC with a loan-to-value of 65%), in contrast to a much more appealing 2.58% tracker rate (First Direct with a loan-to-value of 65%).

CML Director General, Michael Coogan, said: “We are still in a two-speed mortgage market. It appears that low interest rates for those with substantial deposits, coupled with this year’s sustained increases in house prices, are encouraging more people to buy or move home.

“But the same low interest rates that are driving house purchase activity provide little incentive for borrowers to refinance their loans. This, coupled with ongoing tightness in lending criteria, continues to hold back the remortgage market.”

Today, the Monetary Policy Committee (MPC) decided to keep the BoE base rate unchanged for the 10th consecutive month at 0.5%. Widely expected by analysts, many believe it will remain at its record-low for the foreseeable future.

David Kern, Chief Economist at the British Chambers of Commerce (BCC), commented: “Following last month’s increase in the Qualitative Easing (QE) programme, we expected the MPC to adopt a ‘wait and see’ posture – with no changes to interest rates or QE.

“For now, the MPC and Government should focus their efforts on specific measures aimed at removing obstacles to bank lending.”