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Borrowers turn to fixed rates as 'rate cycle hits the floor'
The take up of fixed-rate products increased further last month as consumers realise that borrowing will not get any cheaper.
Figures from the Council of Mortgage Lenders (CML) show that in April 69 per cent of borrowers took out fixed-rate mortgages with an average rate of 4.83 per cent, the highest share since June last year.
There was also a modest improvement in the number of loans for house purchase, but activity is still very low by historical standards with 35,600 house purchase loans in April, compared to an average of 88,000 loans in April over the last seven years.
CML head of research, Bob Pannell said: "With the interest rate cycle now at its floor, an increasing proportion of borrowers are taking out fixed rates.
"There are tentative signs of house purchase lending stabilising, but we need to see considerably higher transaction levels to underpin house prices."
It comes as an influential think-tank declared the recession as over this week. Figures released by the National Institute of Economic and Social Research showed growth in GDP resumed in April and May.