With an interest rate hike expected early next year, homeowners are looking to secure a low interest rate now and that is pushing up demand for remortgages. Home buyers are also in pursuit of low interest rates and August data from the Bank of England revealed there were 71,030 mortgages. This marked a 19 month high and the total value amounted to £12.2 billion.

Howard Archer, at IHS Global Insight, said, “It’s likely that August's performance may have been lifted by some house buyers looking to move quickly to try and lock in a low mortgage interest rate before they start rising. Stronger buy-to-let activity is also pushing up mortgage approvals.”

There were 40,931 remortgage approvals which was the highest number since 2008.

The housing market has performed better than expected for the year. House prices are due to rise 7% for 2015 and another 6% in 2016. That is much higher than the forecasted 3% to 5% expected in the beginning of 2015.

Homebuyers therefore are warned they will be facing higher house prices and higher interest rate mortgages. These facts are expected to keep mortgage demand strong. Homeowners are also expected to keep shopping for cheap interest rates in remortgages.

The Bank of England’s Monetary Policy Committee (MPC) will meet tomorrow to discuss the need for a hike to the standard base rate. While there is not an expectation that the majority of the MPC will vote for an increase, there is an expectation that the minutes will reveal several of the members did vote for a hike. If so, that should increase the rush for both mortgages and remortgages over the next months.

The current standard base rate has remained unchanged since March 2009.