CML Sees 29% Rise in UK Mortgage Lending

Latest report published by the Council of Mortgage Lenders (CML) on its web-site on Monday, October 12th suggests that mortgage activity was much higher in August 2009 than in 2008.
The number of mortgage loans, which were secured by UK borrowers in August 2009, to purchase a house grew by 29% from August 2008. However, the figure was slightly lower (5%) than in July 2009.
According to the Council of Mortgage Lenders, 53,000 loans were taken for house purchases in August 2009, which is almost twice the number of loans secured in the first quarter of 2009, and yet almost twice below the 7-year average of 100,000. Of these 53,000 loans, 19,200 were granted to first-time buyers, and 33,400 – to homeowners moving houses.
Not all the data in the CML report was positive, however. In the opinion of Mr. Paul Samter, CML economist, the British mortgage market is on “two speed settings", which means that the growth in mortgage lending is not supported by growth in remortgage lending. Remortgaging activity in the UK fell by 22% from its July level and by 57% from its August 2008 level. At the moment, remortgage loans stand at 32,000.
He explains such a sharp decline in remortgaging activity by low interest rates and restricted availability of attractive remortgage deals.
UK gross mortgage lending, which includes buy to let loans, remortgage loans, and mortgage loans, fell by 36% from the level of August 2008 to £12.3 billion.
Overall, CML specialists are determined that the recent improvement in house purchase activity, despite all the seasonal downs, will bring about recovery of the housing sector. Yet, remortgaging activity in the UK needs to see better days as its low levels are currently undermining gross lending.
The Council of Mortgage Lenders said that its report on UK housing market activity in September is due on Wednesday, November 11th.