May 26 2016 Latest news:
Adam Aiken, Editor
Wednesday, April 20, 2011
There was brighter news in the remortgage market in March, with increased activity both from buyers and from people remortgaging.
Total lending during the month was about £11.3bn during the month – a 21pc rise from February’s £9.3bn figure – according to the Council of Mortgage Lenders (CML).
The March stats mean that first-quarter lending was an estimated £30.1bn, which represents an 11pc decline from the fourth quarter of last year (£33.9bn) but a 1pc increase from the £29.7bn lent in the first three months of 2010.
“The housing market has emerged hesitantly from hibernation,” said CML chief economist Bob Pannell.
“Household finances are under a lot of pressure, and as a result demand for house purchase loans fell in the first three months of 2011.
“Lenders expect mortgage credit availability to improve this quarter, and this should help to underpin house purchase activity, albeit at pretty low levels.
“Remortgage demand, meanwhile, continues to firm, presumably linked to expectations of higher base rates. Remortgage approvals in February were the highest for more than two years. Stronger remortgage activity looks set to continue propping up overall lending.”
Jonathan Samuels, chief executive of Dragonfly Property Finance, sounded a cautionary note.
“Mortgage lending may be up in March but it’s still down in historical terms,” he said.
“We certainly don’t see this as the beginning of a trend given current conditions.
“For the rest of the year and on into 2012, the mainstream mortgage market – and house prices generally – will continue to flatline.”
He added: “It could be two to three years before the mainstream mortgage market finally gets back on track. The recession is over but it doesn’t feel like it’s over and that’s what is restricting demand.”
Brian Murphy, head of lending at broker the Mortgage Advice Bureau, said: “The latest lending figures are surprisingly positive and reflect what we’re seeing in the market, with remortgage activity particularly buoyant at the moment as homeowners continue to take advantage of the favourable interest rate environment.
“However, it’s important not to get too far ahead of ourselves. The level of mortgage activity in March is still down on 12 months ago, and it’s far too soon to talk optimistically about a housing market recovery when buyers are still suffering from a serious lack of confidence.
“It is also worth bearing in mind that although March has been a good month for mortgage activity, there is every chance that April, despite the glorious weather, could be a total washout, with Royal Wedding fever sweeping the country and people taking advantage of two bank holiday weekends to go away.
“How the market bounces back in May, following a predicted April lull, could very much determine how the mortgage market performs for the rest of the year.”