Shifting tides: lower interest rates begin to fuel a hotter lending market

Lower interest rates are fuelling a rise in mortgage lending, according to Kelvin Davidson of Cotality. New lending has increased for 10 consecutive months, with banks showing more flexibility on criteria like loan-to-value and debt-to-income ratios.

First home buyers are a key driver, with many successfully securing low-deposit loans. While money is more available for qualified borrowers, the housing recovery's strength will depend on the broader economic rebound and employment security.