April mortgage lending stages slight recovery

Gross UK mortgage lending rose by 8% in April (to £26.1 billion) when compared to March.

However, latest figures from the Council of Mortgage Lenders (CML) leave little doubt that the market is still depressed, with gross lending for the month down 5% year-on-year.

The April rise followed two consecutive months of decline and reversed the 24% fall in gross lending seen in March.

Forty-two per cent of April borrowing (£11 billion) took the form of remortgaging. Volumes were up 14% on March and 38% on April 2007.

During the month, loans for home purchases totalled £7.7 billion, with volumes up 9% on March (at 50,700) but down 36% on April 2007.

House purchases now account for 30% of the mortgage market, down from 44% a year ago; in April volumes of home mover loans rose 13% on March (to 32,300) but remained 38% below the April 2007 figure.

First-time buyers secured 18,500 loans in April, up 4% on March but 36% lower than April last year.

Those getting a foot on the property ladder borrowed an average 3.3 times income and put down an average deposit of 13%.

The CML’s director general, Michael Coogan, says he expects to see a further weakening in house purchase lending volumes in the coming months.

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