The figures showed a 5% increase in the volume of remortgage lending (no change in value) from January and up 3% by volume and down 3% by value from the same month last year.
The Bank of England’s large increase in remortgage approvals in early 2011 has not yet fed though to completions but is expected during the next few months.
The remortgage data was part of the CML’s figures on the housing market. The figures show that mortgage lending increased slightly in February after a particularly downbeat January.
There were 32,300 loans for house purchase, worth £4.6 billion, up 8% by volume and 5% by value from January, but down 12% (by volume and value) from February 2010.
Increases in loans to both first-time buyers and home movers contributed to the boost to house purchase lending. First-time buyers made the largest contribution with the 12,400 loans (worth £1.4 billion) advanced in February amounting to a 13% increase in volume (8% in value) from January but an 11% decrease in volume (13% in value) from February 2010. The number of loans advanced to home movers increased by 6% (with the value unchanged) compared to January, but were also down from the same month last year, 12% by volume and 14% by value.
For the second month running first-time buyers typically borrowed 80% of their property’s value in February and they borrowed 3.11 times their income, the lowest income multiple since August 2009. Home movers have seen little change in the percentage of their property they borrow with the average fluctuating just under 70% since mid-2009. In February it was 69%. The proportion of their income home movers spend on mortgage interest payments has been in single figures since the start of 2010 with February’s being 9.5%.
With uncertainty surrounding the timing of future interest rate rises there has been a gradual shift back to fixed-rate products from the low of 45% in May 2010. In February, 57% of all mortgages advanced were at a fixed rate, up from 52% in January.
Bob Pannell, CML chief economist, said: "The February fall in lending compared to last year was despite the fact that lending in the early months of 2010 was itself depressed following the end of the earlier stamp duty concession.
“But research suggests cash purchases have remained steady since the credit crunch, indicating that the housing market may be holding up better than the low mortgage lending levels suggest.
"We are likely to see a continuing increase in remortgage activity this year, especially if and when rate rises occur."
