Clients rushed to remortgage in May as rates were low

18 July 2011

A 17% increase in the number of remortgage loans advanced in May has been attributed to a rush among consumers to secure fixed deals while rates were low.

Data from the Council of Mortgage Lenders reveals there were 29,000 remortgage loans worth £3.6bn given out in May, representing a monthly increase of 17% by number and 20% by value, and an annual rise of 11% by number and 9% by value.

Ray Boulger, senior technical manager at John Charcol, says the CML figures are based on completions so May’s data reflects mortgages that were agreed in February and March.

He says: “There were a lot of cheap fixed rates available in that period which is why remortgage activity has increased, but I expect it to fall over the coming
months.”

The CML’s data also shows that there were 41,500 loans for house purchase worth £5.9bn advanced in May, up only 1.7% by number and unchanged by value compared with April, but representing a decrease of 5% by number and 6% by value on an annual basis.

Michael Coogan, director-general of the CML, says that although seasonal factors will push up house purchase lending over the coming months, it is unlikely to rise dramatically.

He says: “There is no evidence of drastic changes on the horizon or significant shifts in direction for the mortgage market.

“These stable conditions are expected to continue for the rest of the year.”

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