Mortgage lenders report modest increase
The number of mortgages taken out by people buying a home in the UK rose by 4% during February, figures showed yesterday.
A total of 24,300 loans for house purchase were advanced during the month, up from 23,400 in January, the Council of Mortgage Lenders said.
But it warned that activity still remained very weak by historical standards, with mortgages taken out by people buying a home running at only around a third of the average total for February of 76,000 seen between 2002 and 2007.
There was also a rise in the number of first-time buyers getting on to the property ladder, with 9,400 mortgages taken out by people buying their first home during the month — 7% more than in January.
But the figure was nearly half the 17,400 people who got on to the property ladder in February last year, while first-time buyers also put down a record 25% deposit during the month – double the 11% put down 12 months earlier.
The Bank of England published figures at the end of last month showing a 19% jump in the number of mortgages approved for house purchase.
But the CML stressed that although there were “some signs of improvement” at the beginning of the borrowing process, activity was still at a “very low level historically”.
Michael Coogan, CML director general, said: “We are not convinced that underlying trends have shifted sufficiently to change our forecasts for mortgage market activity in 2009, but there are some positive signs for later in the year.
“Some large banks are making more funding available through enhanced lending commitments, which is helpful but will not satisfy consumer borrowing demand on its own.”
He said more measures needed to be introduced by the Government in the Budget to boost the mortgage market.