CML: homeowner remortgages down 10%

Posted on Monday, July 20 by Joy Tibbs

Mortgage lending levels recovered in May compared with April, but were down compared with a year ago, according to the Council of Mortgage Lenders (CML).

Remortgage activity fell 10% month-on-month in both volume and value in May. It also dipped in comparison with May last year, continuing the relatively subdued homeowner remortgage activity levels seen since 2009.

Buy-to-let lending continued to increase year-on-year, mainly driven by remortgage activity, but dropped slightly month-on-month due to higher buy-to-let house purchase lending activity.

Overall, the value of homeowner loans for house purchase accounted for 53% of gross lending, while remortgage activity accounted for 23%. Homeowner loans as a share of gross lending has increased since the New Year, while remortgage activity has edged down.

Paul Smee, director general of the CML, commented: “House purchase lending in May was slightly up on the previous month, suggesting the market might be waking up after a subdued first quarter.

“Activity has broadly been down on last year but we expect it to rise in the summer months as, with historically low interest rates and a competitive lending environment, borrowing conditions are relatively favourable.

“But we cannot ignore the continuing affordability constraints caused by high house prices relative to earnings, which will work in a contrary direction.”

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