CML figures indicating that gross remortgage lending as at a near-record low, is unsurprising, according to industry experts.
Meanwhile, the rise in first-time buyers is seen as an encouraging move.
The latest figures revealed that gross remortgage lending is down 37 per cent on last year, while an LMS Remortgage Report said that this represented the lowest proportion of the market since 1999.
LMS chief executive Andy Knee said: “This is to be expected as interest rates are currently at an historic low level and many people – especially those on variable rates – are benefitting from this.
“However, lenders are starting to increase their rates and we believe that borrowers who may be holding back will start to take advantage of the current very attractive 3per cent deals offered by lenders such as HSBC, Leeds Building Society and The Cooperative.
“Indeed, by the end of the year, we believe that we will start to see an upsurge as people look to secure their mortgage repayment before an uncertain 2013.”
Mortgage for Business managing director David Whittaker added: “It’s encouraging to see a rise in first time buyer numbers, this section of the market is the lifeblood of the property sector and a boost is welcome. We shouldn’t get ahead of ourselves though.
“This rise is like bringing a water pistol to a gun fight, it might look the part but it’s not going to save the day. Thousands remain reliant on the private rental sector and landlords need to help fill the housing shortfall. Luckily the buy to let market is performing well and can help provide the safety-net so many would-be buyers need at the moment.”
Paul Hunt, managing director of Phoebus Software said: “There are signs that the wind is changing, with more home loans being advanced in August than has been recorded in any single month for the last two years. Lenders’ efforts to bolster first time buyer activity are clearly having an effect, with more competitive mortgage rates and higher loan to values resulting in a significant jump in first time buyers’ loans since last month and compared to this time last year. I’m hopeful that these efforts will be bolstered further by the Government’s Funding for Lending and New Buy programmes over the next few months.”
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