The second phase of Help to Buy has helped the mortgage market shift up a gear and prompted a surge in activity from borrowers and lenders.
The number of new applications for purchase mortgages rose 19% in October and 59% year-on-year, according to the Mortgage Advice Bureau (MAB), which publishes its National Mortgage Index today.
Mortgage rates have fallen further, with new record lows for two-year trackers and two and three-year fixed rates.
Average two-year trackers fell 0.07% in October to 2.91%, the lowest since MAB’s records began in June 2007.
The average three-year fixed rate also recorded a new low of 3.87%, down 0.05% from September, while average two-year fixed rates dipped to 3.53%, down 0.03%.
And the average LTV hit a record high of 72.2% in October, up from 68.9%.
That is the highest figure since MAB’s records began five years ago in January 2009, as well as the biggest monthly change.
There was also a surge in new products with an extra 907 mortgages in October, the biggest monthly increase since April 2011.
Brokers have the largest choice of mortgage for five years, with 8,463 to choose from.
The total figure of 11,652 products across the market has not been bettered in the four years since MAB began tracking this data in January 2009.
The salary of the average buyer fell to a six-month low of £38,887, a drop of 2% from September, suggesting the market is beginning to open up to a wider range of house hunters.
The typical buyer salary in London was £65,165 in October, down from £70,742 one month earlier. In the North, the typical buyers’ income dropped from £35,362 to £32,574.
London also recorded the biggest monthly increase in higher-LTV applications, shifting the average purchase LTV up by 9.1 percentage points to 67.2%.
Brian Murphy, head of lending at MAB, said: “The Help to Buy mortgage guarantee is still in its infancy and it’s reasonable to assume the best deals for consumers are yet to come.
"What these figures show is that the scheme’s galvanising effects are not limited to lenders who are directly participating at this stage.
“Spreading positivity about property purchases has visibly increased demand and spurred lenders into bidding to win over consumers. It is an encouraging sign that we are already seeing a change in the typical profile of mortgage applicants."
The MAB data is taken from more than 500 brokers and 800 estate agents.
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