New Mortgage Report Published by CML

The report published by the Council of Mortgage Lenders (CML) yesterday, on July 11th, 2011, suggests that mortgage activity picked up in May. As such, the number of loans issued by banks for house purchases and remortgages increased from 40,800 in April to 41,500 in May. It is interesting to note that most borrowers were applying for fixed-rate mortgages. In the opinion of CML experts, this trend can be explained by the instability of the economy as well as by the uncertainty over the future of the base rate and financial uncertainty of borrowers. Commenting on the findings, Mr. Gardner of mortgage website Obligo, said that "many households are in a position such that they cannot even afford to gamble on rates. They have to play a conservative hand and opt for a fix." The good news, however, is that lending to first-time buyers improved in May. The number of mortgages taken out by this group of borrowers grew from 15,800 in April t0 15,900 in May. Most likely, this trend can be explained by the fact that the deposit required by banks was reduced from 25% to 20%.