Mortgage rates dropped to their lowest on record between July and September, according to figures released by the Bank of England this morning.
The overall average interest rate on mortgage advances dropped to 2.76 per cent, from 2.83 per cent. The proportion of new mortgages that are fixed-rate climbed to 80.7 per cent from 78.9 per cent.
Gross advances, which ignores mortgages repayments, increased 19.8 per cent compared with the same three month period in 2014. The total stock of mortgages has climbed 2.1 per cent over the last 12 months to £1.3 trillion.
More people were able to borrow more than four times their income. The proportion of mortgages advanced that were more than four times the borrowers income climbed to 10.3 per cent in the three months to September, from 9.3 per cent in the three months to June.
The Bank of England was granted two main levers earlier this year to deal with the housing market if it considers it to be overheating but would rather avoid raising interest rates. It can adjust the amount people can borrow relative to their income and it can also adjust the amount people can borrow relative to the value of the property they purchase.