Recent Research from the Council of Mortgage indicates that lenders have seen the balance between remortgage and purchase lending tipped towards remortgaging since the start of the year.
Remortgages accounted for as much as 37% of all lending in Q1 of 2011, a 7% increase from the final quarter of 2010.
In addition to the increase of lending within the period, there was a 22% volume increase and 17% value increase from the first quarter of 2010.
The Director General of the Council of Mortgage lenders Michael Coogan stated: We saw a significant increase in both house purchase and remortgage lending in March but over the first quarter of the year as a whole, the picture was subdued and that is unlikely to change for the foreseeable future.
“Looking ahead to lending figures in the coming months, the Easter, royal wedding and May bank holidays will impact on the level of activity, timing and spread of completions in the second quarter meaning that any one month’s data should not be interpreted as a reflection of a trend. It may take until publication of the second quarter’s activity to get a full understanding of how the market has reacted to the squeeze on household incomes.’
As well as the significant increase in remortgage numbers at the beginning of the year, there was also a sharp increase in the number of first time buyers acquiring mortgages in the first quarter of 2011. 14,000 mortgages were granted worth £1.7 billion, with an increase of 28% in volume and 31% in value during the period.
23,200 mortgages were also granted for other home movers, worth £3.2 billion. This saw a 22% increase in volume and 23% by value. However, it should be noted that both the first time buyer mortgages market as well as the home mover market have seen substantial falls in levels compared to the first quarter of 2010. The decline in first time buyer mortgages is a concern as the movement at this end of the property ladder increases the mobility of those wishing to sell their own property and move up the ladder. The availability of first time buyer mortgage deals is still restricted with many lenders requiring a healthy deposit and others turning away from interest only mortgages.