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Mortgage lending up 25 per cent

24 May 2004
Figures released for April show mortgage lending is up by 25 per cent on the same time last year.

According to the Council of Mortgage Lenders, April 2004's lending figure totalled £25 billion, one per cent higher than in March and 25 per cent higher than in April 2003.

House purchase loans accounted for 51 per cent of gross lending, at £12.8 billion, matching the record figure of October last year.

Lending for house purchases was 11 per cent higher than in March, and 58 per cent higher than in April 2003. This figure seems to have been bolstered by seasonal factors and the effect of rising house prices.

Loans to first-time buyers slid from 31 per cent in March to 28 per cent.

Commenting on the latest figures, CML director general, Michael Coogan, said the record house purchase lending demonstrated the "enduring demand for home-ownership."

On the other hand, remortgaging slowed to just 33 per cent of the market - the lowest proportion since September 2002. The value of remortgaging fell from £10.1 billion in March to £9.2 billion.

This slowdown since the beginning of the year appears to bring to an end the trend of rising remortgage activity that has been evident since the late 1990s.

Mr Coogan added: "Given that there is some relationship between remortgaging and mortgage equity withdrawal, this may suggest that the consumer appetite for borrowing against housing equity could at last be showing early signs of flagging."

He concluded by saying: "If so, then this would be a helpful pointer towards the likelihood of a soft landing for the housing market."