A total of £102.2bn was advanced for remortgaging from Jan 03 to Oct 03 against £65bn for the same period in 2002, representing an increase of 57%. Remortgaging now accounts for over 45% of the market while advances for house purchases havefallen slightly. The decline in first-time buyers is the primary reason why the growth in gross advances for house purchase is falling as they continue to feel the squeeze. The year 2003 witnessed a new record level in gross advances for the UK mortgage market. A total of £222.4 billion in gross mortgage lending was realised for the period January 2003 to October 2003 – a figure which already exceeds the total gross mortgage lending realised in 2002 (£218.6 billion). Datamonitor, however, predicts that the huge growth in gross mortgage lending witnessed in the last two years will not be sustained, primarily because growth in house prices is forecast to fall back to a sustainable level between 5% and 7% in the forthcoming years. Under these conditions, gross advances for residential mortgages in the UK market are set to increase at a compoundannual growth rate (CAGR) of 4.6% in the years to 2008 and will reach a total of £351 bn. This compares to a CAGR of 25% between 1998 and 2002.
