Remortgaging picks up in first quarter of 2011
Remortgaging deals outweighed regular home loan lending in the first quarter of 2011, according to the Council of Mortgage Lenders (CML).
The data from the CML shows that remortgaging packages made up 37 per cent of all lending in the period, up from 30 per cent in the final quarter of 2010.
Loans to home buyers in March rose by 24 per cent to 37,800 from February, and the total value increased by 26 per cent to £5.4 billion.
Although this represents a notable increase on the figures from the beginning of 2011, lending still remains subdued when compared with the same time last year, with it down 17 per cent in volume and 16 per cent in value.
Remortgaging loans came in at 33,900 and totalled £4.1 billion, showing an increase of 16 per cent by volume and 17 per cent by value against February.
Consumers may be anticipating a rise in the base rate and this may go some way to explaining the activity within remortgaging and should mean a strengthening of remortgage lending over the next few months, the CML predicts.
Michael Coogan, CML director general, said: "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," he added.
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