Remortgage loans in August jumped 30% year-on-year
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The Council of Mortgage Lenders says the market is starting to show signs of life, after a 30% increase in remortgage business in August.
There were 34,100 remortgage loans taken out in August, worth £4.2bn. By volume and value this was more than 30% higher than in August 2010.
House purchase lending also rose in August. There were 52,000 loans advanced, worth £7.9bn, up from 48,700 in July and from 51,000 in August 2010.
The number of house purchase loans to first-time buyers rose by 5% both from July 2011 and August last year, while the value rose by 4% from July and 9% from August 2010.
Paul Smee, director-general of the CML, says: “Even though it is impossible to ignore the knocks to confidence emanating from the eurozone, August lending showed welcome signs of life.
“With those moving house experiencing a record low in the proportion of 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.”
Chris Broome, director of Broome Financial Planning, says the figures are encouraging given the overall state of the economy.
He says: “On the one hand, you have an economic climate that disincentivises consumers to buy, but on the other hand the combination of competitive mortgage rates and low house prices is proving irresistible.
“In many respects, prospective buyers have become hardened to the current climate.”
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