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Remortgaging boosted lending in April


Published: 19 June 2013 | Author: Bernard Clarke

Growth in remortaging helped boost lending in April, according to data we published earlier this month.

Lenders advanced £3.4 billion to those remortgaging, up by 10% compared to March. Although remortgaging was 3% lower than in April last year, the rate of fall has decreased over the past two months. More buoyant remortgaging activity contributed to a 5% increase in lending in April.

First-time buyers took out loans worth £2.5 billion in April, down by 1% compared to March. Direct comparisons of year-on-year lending in this area of the market are distorted by the effects of the removal of a stamp duty concession for first-time buyers in March 2012, which caused fluctuations in monthly lending volumes last spring.  But in the first four months of this year, lenders advanced almost 71,000 loans to first-time buyers, 11% more than the 63,500 taken out by these buyers in the same period in 2012.

Another moderately encouraging sign for first-time buyers was that the average loan-to-value ratio for this group edged up to 81%, having been 80% or lower for much of the last four years. This slight easing could be an indicator of increased availability of higher loan-to-value mortgages for first-time buyers.

Lending to home movers totalled £3.8 billion in April, down 3% on the preceding month. Overall, lending for house purchase was little changed during the month.  Like the underlying components – comprising activity by first-time buyers and movers – the number of loans advanced edged down slightly.