Mortgage advances up by 8% during April
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Your support makes all the difference.Mortgage advances to people buying a home jumped by 8% during April but lending levels remained down on a year earlier, figures showed today.
Around 40,900 loans were taken out by people moving home during the month, compared with 37,900 in March, but the total was still 2% lower than in April last year, according to the Council of Mortgage Lenders.
Although advances were higher than they had been earlier in the year, they were also still running at around half the level typically seen in April before the credit crunch struck.
The group said with recent figures from the Bank of England showing a fall in mortgage approvals for house purchase in April, there was likely to be a "lull" in lending to buyers in the next few months.
CML director-general Michael Coogan said: "The market continues on a stable footing and the increase in house purchase lending is a good sign that the stability will continue throughout 2011.
"However, the economic outlook, coupled with Bank of England subdued approvals data for April, suggests a muted summer for mortgage completions so we do not expect further increases in lending over the coming months."
The number of people remortgaging dived by 28% during the month to 24,700, as the threat of an imminent rise in interest rates faded.
The CML's figures are in line with other data on the housing market for April, which showed a drop in activity as people made the most of the extended bank holiday weekends.
Lending to first-time buyers rose by 7% during the month, broadly in line with the increase in advances to all types of borrowers, with 15,800 mortgages taken out by people taking their first step on the property ladder.
First-time buyers also borrowed an average of 80% of their property's value, the highest level for most of the past two-and-a-half years, but still well down on the 90% they typically borrowed before 2008.
For the second consecutive month, only 4% of first-time buyers took out an interest-only mortgage, a significant turnaround from the 30% of people buying their first property who opted for this type of mortgage before 2008.
Brian Murphy, of mortgage broker Mortgage Advice Bureau, said: "Activity during April was muted because of the seemingly endless bank holidays and royal wedding and this could impact completions in the next quarter.
"However, while activity is still at historically low levels given ongoing caution among both lenders and consumers, during May and the first half of June it switched back to pre-April levels."
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