Number of mortgages up 29% in August

Published 12th Oct 2009

Remortgage activity remains subdued amid low interest rates and lack of availability for good deals


The number of loans taken out to buy houses dipped 5 per cent in August from the previous month, but is up 29 per cent from the same month a year ago.

The Council of Mortgage Lenders (CML), which produced the figures, said the 53,000 loans taken out to buy homes in the month was well below the August 100,000 average in the seven years before the credit crisis, but still more than twice the level of activity at the start of the year.

Of the total, 19,200 loans were to first-time buyers, while 33,400 went to people moving home.

However, the CML said the mortgage market was on "two speed settings" since the amount of remortgaging continued to decline, dropping 22 per cent from July to 32,000 and 57 per cent from August a year ago.

"Remortgaging activity continued to fall away due to the extremely low interest rate environment and restrictive lending criteria for the most attractive deals," it said.

Gross mortgage lending, which encapsulates home purchases, remortgaging and buy-to-let lending, fell 36 per cent from a year ago to £12.3 billion.

The CML said: “House purchase activity has revived from its moribund state at the beginning of the year. It will be a drawn out recovery process with seasonal ups and downs, but house purchase activity is now on a firmer footing. But remortgaging demand has fallen away in the low interest rate environment and this is dragging down gross lending levels overall.”

Source: ' Times '

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