Remortgages hit highest levels this year in April

Remortgage lending has bounced back in April with its best month of the year as it drives growth in overall mortgage lending. Council of Mortgage Lenders figures show £3.4bn was lent to borrowers remortgaging in April, up 9.7 per cent on the £3.1bn advanced in March.

Remortgaging has been at historically low levels as borrowers sitting on cheap rates have lfelt reluctant to move. It is still down 2.9 per cent down on the £3.5bn advanced last year.

Nonetheless April was the highest figure since November last year when £3.4bn was advanced to remortgage borrowers. The increase shows the impact the lowest mortgage rates ever are having on borrower attitudes towards mortgages.

Now is the time to speak to your broker to find the best remortgage deals and benefit from  releasing equity or simply saving on monthly payments.

FTB growth

Total mortgage lending also saw a 4.3 per cent boost with the best April since 2008 as CML statistics show lending grow from £11.6bn to £12.1bn in April. The other big winner at the moment are first-time buyers, despite deals falling slightly by 1 per cent in April with £2.5bn lent on 19,400 loans compared to 19,400 and £2.5bn in March.

Last year's figures were heavily influenced by the end of the stamp duty holiday for first-time buyers on homes worth up to £250,000. Transactions traditionally drop off as many rush to buy before the end of the offer.

The slight drop does not represent a trend as first-time buyers have seen 70,700 loans advanced this year, which is 11 per cent better than the 63,500 loans advanced to these borrowers over the same period in 2012.

Nearly half of all purchase loans went to first-time buyers, which is also much higher than the 38 per cent average since the crash struck in 2007.

There was more good news as the average loan to value crept up to 81 per cnet from 80 per cent in March while there have also been more mortgages sold at a higher level. Home movers and buyers remained at steady levels with 23,500 and 42,600 loans respectively in April.

Positive data

The slew of positive data shows the housing market is looking much brighter for first-time buyers this year as higher loan to values become available. It also shows a major increase in remortgaging as cheap deals force people to think again as Bank of England base rate remains stuck on 0.5 per cent.

Two-year fixed rate deals are hitting record lows of below 2 per cent as Government support, through the funding for lending scheme, hits home. Longer-term fixes are also proving attractive with rates consistently below 3 per cent on five-year deals and 4 per cent on 10-year fixes.

All low rate deals are only available to around 60 per cent loan to value and are usually accompanied by high fees. However, remortgaging has become much more attractive to many as they realise they can save thousands of pounds a year on their deal.

Stable house prices and a growing economic recovery has also left consumers with more confidence to take more equity out of their home with a remortgage.

Many are seeing the benefits of freeing up extra cash from their property to re-invest and spend on themselves.

Future

The mortgage figures for April show there are more mortgages available and remortagees and first-time buyers are enjoying a renaissance after years in the wilderness. It shows that borrowers can be confident that getting a mortgage is easing with higher loan to values, cheap rates and stable house prices.