CML data highlights market dualism

The Council of Mortgage Lenders says its latest figures suggest the mortgage market has two speed settings.
It has reported a continued recovery in house purchase lending but an increasing slump in remortgaging.
The number of house purchase loans in August (53,000) is down 5% from July but 29% higher than August a year ago. And whilst this is still significantly lower than the August average in the seven years before the credit crisis of 100,000 loans, it is more than twice the level of activity at the start of the year.
There were 19,200 loans to first-time buyers and 33,400 loans to home movers.
House purchase activity, worth £7.2 billion in August, accounted for its largest share of total mortgage activity since 2002.
At £12.3 billion, gross mortgage lending – which encapsulates all mortgage lending activity including house purchase, remortgage, and buy-to-let lending – declined 36% from August 2008.
Remortgaging activity continued to fall away due to the extremely low interest rate environment and restrictive lending criteria for the most attractive deals. There were 32,000 remortgage loans advanced in August, a 22% decrease on July, and a 57% decrease on August last year.
First time buyers typically had a 25% deposit and borrowed 3.03 times their income. Home movers typically borrowed 66% of the property’s value and 2.74 times their income.
The profile of new lending remains cautious with over three quarters of loans taken out at fixed rates and on a full repayment basis.
CML economist Paul Samter said: “House purchase activity has revived from its moribund state at the beginning of the year. It will be a drawn out recovery process with seasonal ups and downs