Remortgaging accounted for 37% of all lending in the first quarter of 2011, the CML has reported, an increase from 30% in the last quarter of 2010.
The number of loans advanced for house purchase in March increased by 24% to 37,800 from February, and the value increased by 26% to £5.4 billion. However, house purchase lending activity is still below the levels seen at the same time last year – down 17% in volume and 16% in value.
There were 33,900 loans for remortgage, worth £4.1 billion, advanced in March, up 16% by volume and 17% by value compared to February and up 17% by volume and 13% by value compared with March 2010.
House purchase lending during the whole of the first quarter was down 26% by volume and 27% by value from the last quarter of 2010. Remortgage lending was up 14% by volume and 11% by value from the fourth quarter.
4,600 mortgages, worth £1.7 billion, were advanced to first-time buyers in March, an increase of 28% in volume and 31% in value from February, but a fall of 17% in volume and 16% in value compared to March 2010.
Home movers also saw an increase from February, with the 23,200 mortgages, worth £3.7 billion, up 22% by volume (23% by value) from February but, as with first-time buyers, down 17% by volume (16% by value) compared to a year ago.
The number of mortgages to both first-time buyers and home-movers fell on a quarterly basis. First-time buyers fell 23% and home movers 28%.
First-time buyers borrowed on average 79% of the value of their property in March, and in the first quarter as a whole. Home movers faced a similar picture. In March and the first quarter they borrowed on average 68% of the value of their property.
Before the financial crisis it was typical for around 30% of loans to first-time buyers to be on an interest-only basis. In March 2011, only 4% of first-time buyers took out an interest-only mortgage.
Michael Coogan, CML director general, said: “We saw a significant increase in both house purchase and remortgage lending in March but
