Mortgage lending springs back after a downbeat winter

Mortgage lending springs back after a downbeat winter

16:48 PM, 8th April 2011, About 13 years ago

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Mortgage lending thawed in February after a drab couple of months affected by the bad weather.

The Council of Mortgage Lenders (CML) figures were upbeat all round for first time buyers, movers and remortgages.

Around 32,300 movers grabbed loans worth £4.6 billion – up 8% in number and 5% in value from January – but the figures were still 12% down compared with February 2010.

Banks and building societies remortgages worth £2.9 billion, with the number of loans rising from 23,200 to 24,300 – up 5% on January and 3% from February 2010.

First-time buyers snapped up 12,400 loans worth £1.4 billion – a 13% increase in the number of borrowers from January but 11% down from February 2010.

With many borrowers concerned about interest rate increases, lending has shifted back to fixed-rate products from the low of 45% in May 2010. In February, 57% of all mortgages advanced were at a fixed rate, up from 52% in January.

Bob Pannell, CML chief economist, said: “The February fall in lending compared to last year was despite the fact that lending in the early months of 2010 was itself depressed following the end of the earlier stamp duty concession.

“Research suggests cash purchases have remained steady since the credit crunch, indicating that the housing market may be holding up better than the low mortgage lending levels suggest.

“We are likely to see a continuing increase in remortgage activity this year, especially if and when rate rises occur.”

The LSL Acadametrics house price index for March shows a monthly fall of -0.1% in the average price and no annual growth (0%), with the average house price in England and Wales standing at £222,146.

According to the survey, everywhere in England and Wales except London and the southeast is experiencing falling house prices.

The figures are based on property transactions registered with the Land Registry – a more useful indicator of the housing market than mortgage approvals that are the base of the Halifax house price survey.

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