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Re-mortgage lending rising

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Fri 14 Aug 2015

Re-mortgage lending rising

 

House purchase lending hit £20.1 billion in June 2015, up 25% on May and up 13% on June 2014 while re-mortgage figures finally started to recover, say the Council of Mortgage Lenders.

In the second quarter gross lending reached £52.2 billion, up 17% on the previous quarter and a 2% rise on the second quarter 2014.

In June, the value of homeowner loans for house purchase accounted for 54% of gross lending, with re-mortgage activity accounting for 25%.

Re-mortgage activity showed a sudden sharp rise in activity in June after a muted beginning of the year, rising in both volume and value by over a third compared to both the previous month and June last year.

Second quarter re-mortgage activity also saw increases compared to the first quarter and the same period last year although the rise was not as sharp.

Buy-to-let as a proportion of total lending remained at around 17% but still makes up a larger portion of total lending compared to the same time last year.

While buy-to-let house purchase rose significantly, the overall rise in buy-to-let lending was driven more by strong buy-to-let remortgage activity.

Paul Smee, Director General of the CML, said: "Notable this month is the uptick in re-mortgage activity among home-owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates.

"It is likely that people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility.

 

"After a slower than expected start to the year, lending now appears to be picking up and in line with our recently revised forecasts."