Market view from Council of Mortgage Lenders

The number of people securing loans for house purchases and remortgaging increased slightly during May but remains 6% lower than the same period last year.

The latest snapshot of the market from the Council of Mortgage Lenders (CML) also revealed the value of loans was flat, news that is unlikely to bring much cheer to beleaguered house builders.

CML said 41,500 loans worth £5.9bn were advanced for house purchases in May, up slightly from the 40,800 recorded during the previous month, but with an identical value of £5.9bn.

May’s figure is also well below the level seen in the same period a year ago when 43,800 loans worth £6.3bn were advanced.

Remortgage lending ticked slightly higher in May with 29,000 remortgage loans worth £3.6bn advanced against 24,700, worth £3bn, in April.

Compared to May last year, remortgage lending was up 9% in value, but remains below its recent peak during March when it reached £4.1bn.

Against a backdrop of rising inflation and fears that interest raise may rise in the coming year, the CML added fixed rate mortgages remain the most common home loan with just 22% of borrowers opting for a tracker mortgage during May.

Duirng the same period last year more than 36% of borrowers were opting for tracker mortgages.

Commenting on the figures Michael Coogan, director general of the CML, said: “Over the coming months seasonal factors are likely to push up lending for house purchase. There is no evidence of any drastic changes on the horizon or any significant shifts in direction for the mortgage market. These stable conditions are expected to continue for the rest of the year.”