According to the Council of Mortgage Lenders the scale between purchase and remortgage lending shifted towards remortgages at the beginning of 2011 with over a third of all lending in Q1 accounted for by remortgages.
Loans advanced for house purchases in March increased by 24 per cent but whilst this is a considerable increase compared with the beginning of 2011, purchase lending is still lower than at this point last year, down by 17 per cent in volume and 16 per cent in value.
With an increase of 16 per cent by volume and 17 per cent by value, compared to March, remortgage loans stood at 33,900, worth £4.1 billion, up 17 per cent by volume and 13% by value when compared with March 2010.
The increased activity for remortgages is more than likely due to speculation over an increase in interest rates.
We also saw an increase of 28 per cent in volume and 31 per cent in value for mortgages advanced to first time buyers in March but when compared to March 2010 this is a fall of 17 per cent in volume and 16 per cent in value.
With an increase in first time buyers we also saw an increase in home movers, with 23,200 mortgages advanced, up 22 per cent by volume and 23 per cent by value but, as with the first time buyers, down by volume and value when compared to a year ago.
Michael Coogan, CML Director General, said:
"We saw a significant increase in both house purchase and remortgage lending in March but, over the first quarter of the year as a whole, the picture was subdued and that is unlikely to change for the foreseeable future.
"Looking ahead to lending figures in the coming months, the Easter, royal wedding and May bank holidays will impact on the level of activity, timing and spread of completions in the second quarter meaning that any one month’s data should not be interpreted as a reflection of a trend. It may take until publication of the second quarter’s activity to get a full understanding of how the market has reacted to the squeeze on household incomes.”
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