According to figures released by the Council of Mortgage Lenders (CML), remortgage lending for April dropped 28 per cent when compared to the figures for March 2011, with around 24,000 remortgage loans being advanced. Despite this substantial drop remortgage lending is up 1 per cent on the same period last year.
Remortgage lending has seen an increase lately, which can be attributed to the expected interest rate rises, with this increase looking less likely it could be that remortgage lending will stay quite static over the coming months.
Loans made to first time buyers improved in April, up from 14,700 in March to 15,800, with the average first time buyer securing an 80 per cent LTV product, an improvement but still below the average 90 per cent that would have been available prior to 2008.
Showing that first time buyers are what the housing market desperately needs, mortgages to home movers also improved in April, up 8 per cent, though when compared to the same period last year lending to home movers has fallen by 4 per cent.
Prior to 2008 interest-only loans would have accounted for around 30 per cent of first time buyer mortgages. According to the figures only 4 per cent of first time buyer mortgages were on an interest-only basis during April.
CML Director General, Michael Coogan, commented:
“The market continues on a stable footing and the increase in house purchase lending is a good sign that the stability will continue throughout 2011. However, the economic outlook, coupled with Bank of England subdued approvals data for April, suggests a muted summer for mortgage completions so we do not expect further increases in lending over the coming months”.
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