CML: Lending up, remortgaging down

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CML: Lending up, remortgaging down

Wed 9th Jul 2008

Lending for house buying increased from April to May while there was a "steep decline" in remortgaging, the Council of Mortgage Lenders (CML) has said.

House purchase loans increased by four per cent to 52,700 and in value by two per cent to £7.9 billion.

Both figures are 44 per cent lower than May last year.

Remortgage loans were at 71,000 - a drop of 14 per cent from April and 23 per cent from May 2007.

The value of remortgaging dropped by 13 per cent in May to £9.6 billion.

Loans to first-time buyers rose by four per cent from April to 19,200 but this was still 41 per cent lower than May 2007.

Michael Coogan, CML director general, said any recovery in lending is "still some way away".

Fixed-rate mortgage costs have reached an eight-and-a-half year high, the Press Association reports.

The average interest rate on a two-year fixed-rate loan increased by 0.37 per cent in June, reaching 6.63 per cent.

It is the highest level since February 2000, according to the Bank of England.

Mr Coogan said the growing popularity of fixed-rate mortgages despite their relatively high rates suggested that borrowers are "prioritising certainty" in monthly payments.

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