Gross lending amounted topped £13 billion in February, down from £13.4 billion in January but still up from the £9.4 billion in February 2001. However, loans for house purchase rose to £6.8 billion, from £6.7 billion, despite the fact that remortgaging dropped to £5 billion in February, from £5.6 billion in January.
The survey reported that the average rate of interest hit 4.7 per cent in February, up from 4.68 per cent in January. The average new variable rate was also up slightly to 4.41 per cent, compared to 4.39 per cent at the start of the year, but the average new fixed rate reached 5.19, up 0.05 per cent from the 5.14 per cent in January. Fixed-rate products declined slightly in popularity, following a sharp rise in January, as they accounted for 37 per cent of new loans in February as opposed to 39 per cent in January.
While the number of loans for house purchase remained unchanged at 90,000 the number of first-time buyers fell to 39 per cent from 40 per cent in January.
Michael Coogan, director general of the CML, said: "Lending remained buoyant in February, even though remortgaging fell from January’s record figure. Remortgaging still accounted for 38 per cent of gross lending, above its historic level of 30 per cent. It is likely to remain popular for the foreseeable future. The discounts that are available continue to bolster the popularity of variable rate loans, despite the attractions of locking into fixed-rate mortgages. This may also reflect the increased cost of fixed rates, due to market expectations that the next interest rate move will be upwards.
"Rising house prices are continuing to make affordability a little more difficult for both first-time buyers and former owner-occupiers, but we still expect the rate of increase in prices to slow as the year progresses."
