There was a significant rise in the volume of mortgage deals secured in the first half of August, with early indications suggesting that this could be a record month for mortgage approvals.

With property buyers and existing homeowners not wanting to miss out on record low mortgage borrowing rates, conveyancing firm QCAS has suggested that we could see record transactions this month following a sharp increase in the number of mortgage deals for August so far – already the highest since 2010.

Victoria Mortimer, Head of QCAS, the conveyancing division of corporate law firm Shulmans LLP, said, “Normally transactions are low in August due to holidays, but we’ve got more work on than ever compared with the same time in previous years. As a national, large scale conveyancer we are well placed to spot emerging trends and there’s no doubt about this one. People are getting their finances sorted before the end of the year.”

Mortimer described activity levels over the past 12 months as “incredible”, with her firm having handled more than £3 billion worth of property transactions during that time.

“We believe this is due to a combination of factors; there are some great deals out there at the moment, the loan-to-value (LTV) ratio constraints have been relaxed, and Bank of England Governor Mark Carney saying that a decision around a rate rise would come into sharper relief around the turn of the year,” she added.

With the Governor of the Bank of England, Mark Carney, recently suggesting that an interest rate rise could be “drawing closer”, Mortimer believes that many lenders will start to pull their lower interest rate products soon and also reduce the period over which rates can be fixed, hence the spike in new mortgage and re-mortgage transactions.

She continued, “More people are taking new mortgages out, and many more are re-mortgaging. This is the busiest summer for lending in a very long time.”

The rise in mortgage lending has been boosted by an increase in the number of deals now available to first-time buyers.

Research from Moneyfacts.co.uk shows that first-time buyers are £2,000 better off thanks to heated competition among mortgage lenders seeking to secure fresh business, with the number of deals available to them increasing from 42 two years ago to 195 today.

“It is fantastic news that first-time buyers are finally seeing the improvement in the mortgage market that they have craved for so long,” said Charlotte Nelson (left), Finance Expert at Moneyfacts.co.uk.

She added, “The launch of the Help to Buy Mortgage Guarantee scheme acted as a starting gun for this sector, making it almost acceptable to lend at higher loan-to-values again. Once these deals hit the market, other providers outside of the scheme had no alternative but to compete to attract customers.”

Not only are first-time buyers benefiting from more choice, but stiff competition between mortgage lenders has caused borrowing rates to fall significantly to the lowest on Moneyfacts.co.uk records. In fact, rates have dropped so much that a first-time buyer would be £2,005.68 better off in the first year by opting for the lowest two-year fixed mortgage today compared with the lowest rate in August 2013.

Nelson continued, “Those looking for a 95 per cent mortgage would be wise to look at the whole market instead of focusing on just Help to Buy, as better deals can often be found outside of the scheme. As an example, the average five-year fixed Help to Buy mortgage charges 5.12 per cent today, whereas the average for those outside of the scheme is just 4.78 per cent.

“However, borrowers will need to bear in mind that while they may be able to afford the mortgage deal now, with the Mortgage Market Review firmly in place they must prove that they can afford the mortgage after any base rate rises.”