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Remortgaging fell by a quarter year-on-year in October

Remortgaging fell by a whopping 24% year-on-year in October and house purchases fell by 16%, says the Council of Mortgage Lenders.

The trade boday says the massive fall was to be expected on basis that in 2009 there was a sudden rush at the end of the year as house buyers tried to beat the deadline for the end of the Labour government’s Stamp Duty holiday.

But compared to September 2010 remortgages were down 9% and house purchases fell by 4%.

There were 17,000 loans to first-time buyers in October, 5% less compared to September and down by 20% year-on-year.

Michael Coogan, director general of the CML, says: “With 2009 lending levels artificially inflated by the end of the stamp duty holiday, we expected to see a decline in lending year-on-year, so today’s figures are not surprising.

“Consumer confidence has also been affected by October’s spending review, despite the relative affordability of monthly mortgage payments, and so a stable but small lending market will continue for some time to come.”

 

 

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  • Paul 10th December 2010 at 11:55 am

    “despite the relative affordability of monthly mortgage payments”

    hahaha.

    Everyone knows that the market needs to be held up by first time buyers, so let’s look a little closer…
    from the CML figures for FTBs

    Average income multiple 3.19
    Proportion of income for interest 13.3%

    Now, call me cynical but, average age of first time buyer is 37, just 4 years off their peak earning age of 41. Are they seriously telling us that typical first time buyer properties for first time buyers cost around 3.2x their peak income? Let’s think about that for a minute; a first time buyer property is just about affordable at historic earnings/price ratio only when the first time buyer is approaching peak earnings. I am sure I do not have to describe explicitly what this means fo rhte market for the next decade or 2. I wonder if Grant Shapps will have another enlightened moment (like when he realised that he couldn’t get a mortgage under FSSA rules).