08/04/2011

Downbeat Mortgage Lending 'Creeping Up'

Mortgage lending across the UK increased slightly in February after a particularly downbeat January, according to new figures from the Council of Mortgage Lenders (CML).

There were 32,300 loans for house purchase, worth £4.6 billion, up 8% by volume and 5% by value from January, but down 12% (by volume and value) from February 2010.

Remortgage lending also increased in February, from 23,200 to 24,300 worth £2.9 billion, a 5% increase in volume (no change in value) from January and up 3% by volume and down 3% by value from the same month last year.

Increases in loans to both first-time buyers and home movers contributed to the boost to house purchase lending.

First-time buyers made the largest contribution with the 12,400 loans (worth £1.4 billion) advanced in February amounting to a 13% increase in volume (8% in value) from January but an 11% decrease in volume (13% in value) from February 2010.

Bob Pannell, CML Chief Economist, said: "The February fall in lending compared to last year was despite the fact that lending in the early months of 2010 was itself depressed following the end of the earlier stamp duty concession.

"But research suggests cash purchases have remained steady since the credit crunch, indicating that the housing market may be holding up better than the low mortgage lending levels suggest.

"We are likely to see a continuing increase in remortgage activity this year, especially if and when rate rises occur."

(CD/GK)

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