New mortgage lending stages modest recovery
The number of loans advanced for house purchases increased by 12% in February, showing a modest recovery on January when the figures were weak due to the end of the stamp-duty holiday and the severe winter weather.
According to the Council of Mortgage Lenders (CML) 35,000 house purchase loans were advanced worth £5 billion, up 49% in volume and 67% in value year-on-year.
For first-time buyers, the average loan-to-value ratio stood at 75% in February, unchanged from a year earlier.
Those getting a foot on the property ladder typically borrowed 3.11 their income and the proportion of income spent on interest payments stood at 13.3%, down from 15.4% in February 2009.
Meanwhile, home movers secured an average loan-to-value ratio of 67% and opted to spend an average 9.6% of income on interest payments.
The number of remortage loans increased slightly on January, to 24,000, but showed a 38% year-on-year decline.
The proportion of fixed-rate mortgages approved held steady at 47% in February, representing the lowest share in around five years.
At 36%, the share of tracker products also showed little movement on January, remaining at its highest level since the CML began keeping such records, in 2005.
The Council’s head of research, Bob Pannell, comments: “With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future although the new stamp duty exemption for first-time buyers could boost the market somewhat and we hope to see the traditional seasonal pick-up as the weather gets warmer and the days get longer.”