Remortgages drop while new mortgage lending increases
According to the Council of Mortgage Lenders (CML) lending for house purchasing increased from April to May 2008 by 4 per cent in volume to 52,700 and by 2 per cent in value to £7.9 billion. Compared to last year these figures are both 44 per cent lower.
Remortgaging numbers were down heavily compared to last year; just 71,000 remortgages which is a drop of 14 per cent for April and 23 per cent from May 2007.
The first signs of a slight recovery for first time buyers appeared with a rise of 4 per cent from April but this is still 41 per cent lower than May last year.
There is up to date mortgage approval data from the Bank of England that suggests the numbers of new mortgage loans will fall further still over the coming months.
Michael Coogan, CML director general, said: “The growing popularity of fixed-rate mortgages, despite the relatively high rates, suggests that many borrowers are prioritising certainty in their monthly payments.”
“Lending levels continue to be lower than last year and any recovery is still some way away, with little sign of the special liquidity scheme increasing the flow of funds to the industry or lowering the cost of funds as hoped. We look forward to an early, positive report from the Crosby review on how the market should address these issues with the support of the tripartite authorities ”