Press
CML reports rise in mortgage lending
FinancialAdvicer 21st May 2009
The number of house purchase loans has increased by 29 per cent in March compared to the previous month, according to the latest figures from the Council of Mortgage Lenders.
First-time buyers accounted for an increasing share of the market with 40 per cent of loans, up from 38 per cent on February.
Bob Pannell, head of research for the Council of Mortgage Lenders, said this was the highest proportion since April 2005, although the absolute number of first-time buyers remained low at 12,500, up from 9200 in February but well short of the 17,800 recorded in March last year.
Mr Pannell said one of the reasons for this was borrowers still needed bigger deposits to be able to enter the housing market.
He said: "Because the flow of lending is still constrained, there is a sharp dividing line in the housing and mortgage markets between those who can raise a substantial deposit and those who cannot.
"For those who can, the burden of debt payments is low and mortgage interest is consuming proportionately less income than for a number of years."
James Carter, principal of London-based IFA Independent James, said: "There seems to be lots of incentives to buy from government schemes and homebuilders. Some people are holding back, but people always have to move. A lot of people are going in because they know it is not the top of the market."
The CML's latest lending statistics came as Mervyn King, governor of the Bank of England, warned against being overly optimistic about green shoots in the economy, stating that a sustained recovery would take substantially more time.