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Assetz® News - Mortgage lending on the rise

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Mortgage lending on the rise

20th April 2005 | back to article listings BACK    print this article PRINT

Borrowers in the UK are demonstrating continued demand for mortgage loans, following a period of decline in recent months, with gross lending topping £20 billion last month.

Throughout March gross lending rose by 13 per cent compared to the same period a year earlier, after a drop in lending of 16 per cent to £55.3 billion in the first quarter of 2005, down from £66 million in the fourth quarter of 2004. According to these figures from the Council of Mortgage Lenders (CML), the fall can be put down to seasonal falls in January and February, which is picking up rapidly as borrowers regain confidence in the market.

In particular house purchase and remortgage lending have seen significant increases in March, with lending for house purchase rising to £8 billion from £7 billion in February. Remortgaging, which had fallen by 24 per cent over the fourth quarter in 2004, saw similar improvements, falling at a slower rate than previous.

From this it can be inferred not only that confidence is returning to the UK housing market, but that different types of investor are making efforts to secure new deals. Last month saw a dramatic increase in the number of first time buyers entering the market, and new trends indicate that a growing number of existing policy holders are looking to secure remortgaging deals.

"The market remains stable, and on course for the "steady as she goes" scenario that we envisaged when we published our forecasts at the beginning of the year," commented CML director general Michael Coogan. "The looming general election may result in a short-lived lull in activity, but overall the market is likely to continue performing in line with expectations.

"As there is a risk of an early interest rate rise, households should consider what steps they can take to ensure that they can continue to meet their mortgage commitments. With the prospect of higher mortgage costs, we expect the remortgage market to remain attractive, particularly for borrowers moving from a special deal on to a standard variable rate in 2005," he added.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/1823.html. Alternatively, please see our full press release archive.

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