David Bitner, head of product operations for The MarketPlace at Bradford & Bingley, comments on today's Mortgage Lending figures from the Council of Mortgage Lenders
"Today's figures from the CML have revealed that remortgage lending has grown by a staggering 70% in the last 12 months. An increase this size is no less than a mortgage revolution! An incredible 1.3 million borrowers have remortgaged their home loan (12% of all UK mortgage borrowers) in the last 12 months, and this figure will not even include those who have switched with their existing lender. If this trend continues, those paying a lender's standard variable rate will be all but eradicated and
lenders could well be left licking their wounds.
What the figures don't show is how much of this is equity withdrawal and how much a straight move onto a cheaper deal. However, reassuringly, recent research* has shown
that prospective remortgagers are still twice as likely to do so to save money rather than increase debt."
*Marketminder January 2003
Modest purchasing and first time buyer increase welcomed
"The Easter upturn in purchasing and first time buyer lending recognises the important part that confidence has to play in the market. Of course, affordability does remain an issue, but with a distinct lack of any other material factors such as a rise in unemployment or interest rates it was likely that the severity of the 11% dip in March purchasing figures was not going to be repeated. However, while it is a small recovery for the first timers, there is still an all too apparent need for more radical
thinking and affordable housing solutions."
"Many people will be surprised how conservative the average 2.66 income multiple lending is to first time buyers, and also that they put down an average of 24% as a deposit. This just demonstrates that the first time buyer is increasingly becoming more mature and financially astute than some may assume. This is also likely to be, in part, a reflection of the
increase in the average age of the first time buyer."
Fixing still remains popular
"The level of fixed rate borrowing has continued to remain high and comes as no real surprise given the incredible deals available earlier in the year. Interestingly, swap rates have come down again recently so we could be in store for Fixed Rate Mortgage War 2 in the coming weeks."
