Homeowners are hurrying to make the most of exceptionally low interest rates, according to the Council of Mortgage Lenders (CML).

UK base rate has remained at 0.5% since March 2009 and Bank of England policymakers are widely expected to instigate a rate increase during the first half of next year. Overall, the CML reported that mortgage lending is “enjoying its best spell since 2008” – during the first eight months of 2015, mortgage lending outstripped annual lending during the financial crisis.

UK house prices rose at an annualised rate of 5.2% in July, according to figures from the Office for National Statistics – a marginal slowdown compared with June’s figure of 5.7%. The average price paid for a home in the UK was £282,000. Meanwhile, the Halifax reported house price inflation of 9% over the first eight months of the year.

During September, the Government reported that 56,401 mortgages had been completed under its ‘Help to Buy’ mortgage guarantee scheme since its inception in October 2013.

CML economist Mohammad Jamei said:
“Mortgage lending is currently enjoying its best spell since 2008. As we expected, the second half of 2015 has seen a pick up in activity in the housing market after a slow start to the year. Low inflation, strong wage growth, falling unemployment and competitive mortgage deals are all helping to support housing demand.
We expect to see further modest growth towards the end of the year, although affordability pressures are likely to limit gains for home movers and first-time buyers.”

Citizens Advice warned, however, that 934,000 homeowners who took out interest-only mortgages do not have a strategy in place to pay off their mortgage at the end of the term. Describing the situation as a “financial black hole”, Citizens Advice warned that interest-only mortgage holders will have to find the capital to pay off the debt or sell their homes or risk repossession