News
House purchase lending increases again
In June 48% of new borrowers took out a fixed rate mortgage-the highest proportion so far in 2010, according to new data from the Council of Mortgage Lenders. Fixed rates had proved unpopular this year compared to the last several years due to an historic low bank rate with little prospect of the rate rising. But with fixed rate prices falling they are starting to become more popular again.
House purchase lending increased significantly in June. There were 52,000 loans advanced up 19% from May 2010 and up 14% from June 2009. This is now the twelfth consecutive month in which lending has been higher than its year-earlier levels.
Lending for remortgage also increased, though only modestly, in June. There were 27,000 loans for remortgage, worth £3.4 billion, up from 26,000 (worth £3.2 billion) in May 2010 but down from 34,000 (worth £4.2 billion) in June 2009.
For the second quarter as a whole, there were 136,000 house purchase loans, worth £19.7 billion. This is 20% higher (by volume and value) than the last quarter and up 17% (by volume) and 30% (by value) than quarter two 2009.
For remortgaging, the second quarter saw 77,000 loans up 2%, from the first quarter, but in stark contrast to house purchase lending, the figure was down 20%) from the second quarter of 2009.
Credit criteria have become a little more fluid in recent months but remain tight overall, in the context of continuing business and market constraints.
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