CML reports 20 billion mortgage bill

Gross mortgage lending in March totalled £20.1 billion, up 13% from £17.8 billion in February, according to the latest data from the Council of Mortgage Lenders.

Whilst the figure appears promising, it is in fact 19% less than this time last year. In the first quarter of 2005, mortgage lending dropped by 16% to £55.3 billion, from £66 billion in the fourth quarter of 2004.

Lending fell for both house purchase and remortgaging over the quarter, by 12% and 24% respectively. These were the lowest quarterly lending figures for house purchase since the first quarter of 1999, and for remortgaging since the fourth quarter of 2002. However, as with the total gross lending figure, house purchase and remortgage lending both increased in March. Lending for house purchase rose to £8 billion, up from £7 billion in February - an increase of 14%.

Commenting on the current market situation, CML Director General Michael Coogan said:
“The market remains stable, and on course for the “steady as she goes” scenario that we envisaged when we published our forecasts at the beginning of the year. The looming general election may result in a short-lived lull in activity, but overall the market is likely to continue performing in line with expectations.

“As there is a risk of an early interest rate rise, households should consider what steps they can take to ensure that they can continue to meet their mortgage commitments. With the prospect of higher mortgage costs, we expect the remortgage market to remain attractive, particularly for borrowers moving from a special deal on to a standard variable rate in 2005.”