Duncan Pownall, mortgage development manager for Bradford & Bingley, said:
"These latest CML figures do not reveal any unexpected trends in the market. The housing market has clearly now stabilised and is functioning in a less frantic manner than in recent years, with lending for home purchasing remaining steady at 47% of all loans. The proportion of first time buyers has increased slightly to 29% of home purchasers, up from 27% last month. While this represents an increase, however, these figures are still alarmingly low by historic standards."
"Despite the recent 'rate war' breaking out across the industry with lenders battling it out to lure borrowers to their products with promises of savings, the number of remortgagers remains relatively low. A marginal increase of £200 million to £10.3 billion is still less than we would have expected, considering the number of potential borrowers some 800,000 - coming off 2003's cheap fixed rates. Lenders are certainly desperate to try and retain customers so are devising more attractive deals to keep them, however, there are undoubtedly many borrowers who will experience a payment shock unless they take action now."
"As the average price of fixes decline from 5.36% last month to 5.31% we see their popularity grow to represent 50% of total lending, the highest proportion since December 1998. Despite speculation that rates could fall further over the next 12 months, many borrowers are plumping for the security of fixed rates. We could see this trend continue until the pricing differential between fixed and variable rates widens enough to warrant a change in borrower mindset. In this kind of environment it is crucial that anyone looking to take a new mortgage receives professional advice to ensure that they get the product that meets their individual financial needs."
