Lending Up Slightly
July 9th, 2008 by 
Guy
Mortgages and lending for house purchase in the UK increased slightly from April to May, according to the Council of Mortgage Lenders, whilst remortgaging dropped.
Mortgages for residential purchases increased by 4% up to 52,700, and by 2% in value to £7.9 billion although both were almost down 50% on May last year. However, there was a massive drop in remortgaging from April to May. There was only 71,000 loans for remortgage, down 14% from April and 23% from May 2007. The value of remortgage lending dropped by 13% in May to £9.6 billion, which represented 39% of all lending in the UK compared to 42% in April.
The number of mortgages for first-time buyers rose by 4% from April to 19,200, but was 41% lower than May last year. Home movers took out 33,500 loans, up 4% from April, and down 46% from May last year. Gross lending declined to £24.5 billion, down 6% from April and 22% from May last year. This is the seventh consecutive month that gross lending has been lower than its position a year before.
The most recent information on mortgage approvals from the Bank of England shows that the number of loans for house purchase will fall further still in coming months.
CML director general Michael Coogan commented: “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.“
Posted in Mortgage news | 