Mortgage Applications Increasing, Remortgage Applications Plummeting
Mon, 12 Oct 2009
Figures released yesterday by the Council of Mortgage Lenders (CML) show that whilst house purchase loans are increasing, remortgages are falling rapidly.
The figures show a 29% increase in House Purchase Loans since August 2008, whilst remortgages are down some 57% on august 2008; both are down on July’s figures but remortgaging takes the crown at a massive 22% down on July’s figures while house purchase loans recoiled only 5%.
It is believed that remortgaging has taken such a hammering as mortgage holders are electing to remain on their Banks Standard Variable Rate which in most cases is lower than the current range of fixed rate options, due to the low interest rate environment.
Whilst these figures may appear bad, they are a significant improvement in both volume and value from the period of January through April, where the lending market was at its most subdued.
Paul Samter, chief economist at the CML, reportedly commented: "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. However, remortgaging demand has fallen away in the low interest rate environment and this is dragging down gross lending levels overall."