Remortgaging levels dropped to £9.3 billion from April’s figures of £9.4 billion with remortgaging as a proportion of total lending also fell from 43 per cent in April to 42 per cent.
Gross lending for May totalled £22.3 billion, up by 3 per cent on the previous month. The figure represents a 7 per cent fall from the £24.1 billion lent in May 2004 but this year-on-year reduction is less than in
previous months.
Michael Coogan, director-general at the CML, said: “In recent months some commentators have been predicting that the housing market is facing an imminent ‘crash’.
“However, if interest rates have peaked, as we believe, this outcome is highly unlikely. In recent months the housing market has been stable but slowing compared to the record figures of 2004. We expect this to continue, even if the rate of annual house price growth continues to fall.”
Duncan Pownall, mortgage development manager at Bradford & Bingley, said: “One reason for the fall in remortgaging could be that many borrowers face early redemption charges if they wish to move loans to a better deal and have therefore chosen to take out a further advance with their existing lender.”
May figures issued by The Building Societies Association (BSA) agreed that the mortgage market has remained steady.
Adrian Coles, director-general of the BSA, commented: “The decision by the Bank of England to keep Base Rates unchanged was clearly sensible in the light of our figures which show the mortgage market has remained steady in recent months. In the absence of major shocks, the market is likely to continue to be subdued but stable.”
