THE level of mortgage lending across the UK rose in April to the highest level this year, figures out yesterday revealed. The 50,700 mortgages represented a 5,000 increase on March but a fall of 36 per cent from April last year, according to the Council of Mortgage Lenders.
Loans to first-time buyers were also down by 36 per cent year-on-year at 18,500, despite a 4 per cent improvement on March. The average first-time buyer deposit was the highest in over three years at 13 per cent of the property value. First-time buye
rs typically took out loans for 3.3 times their income, compared with an average home mover multiple of 2.96.
The level of remortgages increased 14 per cent month-on-month, accounting for 42 per cent of gross lending. But the figure of 32,300 loans for home-movers, while up 13 per cent from March, was 38 per cent lower than in April 2007.
Lending levels will remain subdued, warned Michael Coogan, director-general of the CML. "Monthly house purchase lending volumes continue to be lower than last year's levels and there will be a further weakening in the coming months as recent approvals data has shown."
Recent hikes in mortgage repayment rates have prompted more people to opt for the security of fixed-rate mortgages, with 5 per cent more borrowers opting for a fixed-rate product in April compared with the previous month.
"There has been a resurgence of fixed-rate lending as borrowers are seeking certainty," said Coogan. "This is likely to continue as the anticipation of future Bank base-rate cuts has diminished."
Coogan added that the range of mortgages available would remain limited. "While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market."
The full article contains 317 words and appears in The Scotsman newspaper.
