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Remortgaging in August Was 30 Percent Higher Than Last Year
Remortgaging continued to increase in August, according to new figures released today by the Council of Mortgage Lenders. With 34,100 loans taken out (worth £4.2 billion), both the volume and value were more than 30% higher than August 2010.
House purchase lending also rose in August. There were 52,000 loans advanced (worth £7.9 billion), up from 48,700 (worth £7.2 billion) in July and from 51,000 (worth £7.7 billion) in August 2010.
House purchase lending is spread across both first-time buyers, and home movers and both contributed to the rise. The number of loans to first-time buyers rose 5% both from last month and August last year, while the value rose by 4% from July and a larger 9% from August 2010. Home movers took out 33,000 loans in August (worth £5.5 billion), an 8% increase (10% by value) on July and up 1% (2% by value) from August 2010. Lending to both first-time buyers and home movers was at its highest for over a year.
96% of first-time buyers in August took out a repayment mortgage, unchanged from July and out of 33,000 home movers, 82% (26,900) did the same, up from 80% in July. As existing first-time buyers themselves begin to move home or remortgage, the likelihood is that they will retain a preference for repayment mortgages which will increase the overall popularity of this type of business.
Paul Smee, director general of the CML, commented: "Even though it is impossible to ignore the knocks to confidence emanating from the Euro zone, August lending showed welcome signs of life. With those moving house experiencing a record low in the proportion of their income needed to pay their mortgage interest, it is clear that the low rate environment is a benefit to those with mortgages, even against the backdrop of the gloom in the wider economy."
