Mortgage applications up 12.8% in May

The number of mortgage applications processed by Countrywide advisers increased by 12.8% in May, research by the property services group reveals.

However, this represents a 0.8% decrease compared to May 2010.

The data also shows that fixed rate products are dominantly popular, with all 10 of Countrywide’s top 10 most popular mortgages being fixed rate deals.

These had an average LTV of 88% and an average rate of 5.46%.

Furthermore, seven out of 10 of May’s most applied for mortgages were 90% LTV products.

Remortgage applications fell for the third consecutive month as expectations of a base rate hike continued to recede, making up 23% of all mortgage applications in May.

However, remortgage applications in the buy-to-let sector increased by 6% in the month.

In the housing market, the research shows the number of buyer enquiries increased by 7% in May and viewings rose by 3%, but both indicators remain marginally lower than 2010 levels.

The private rental sector remained buoyant with the number of new tenants registering for rental accommodation increasing by 20% in May compared to the previous month, and rising by 28% compared to May 2010.

Grenville Turner, chief executive of Countrywide, says: “Rather than seeing the traditional uplift in sales activity we tend to see in the summer months, we appear to be in the middle of a standoff between buyers and sellers.

“Those sellers with realistic house price expectations that want to sell are selling. Those with a more speculative view of the market are not.”

He adds that the appetite from buyers for residential property remains relatively constant, but the difficulty of raising mortgage finance continues to be a barrier.

Turner says: “A boost in consumer confidence is critical as the continuing uncertainty over the economic outlook remains as important as the availability of mortgage finance in depressing demand.”