CML reports £20bn of lending in March

Gross lending in March totalled £20.1bn, up 13% from £17.8bn in February, according to the latest data from the Council of Mortgage Lenders.
However, this was still 19% lower than the same time last year.

In the first quarter of 2005, lending dropped by 16% to £55.3bn, from £66bn in the fourth quarter of 2004.

The fall over the quarter was principally due to seasonal falls in January and February.

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 £8bn, up from £7bn in February – an increase of 14%.

The proportion of total mortgage lending for house purchase remained low but stable at 40%.

Remortgaging fell from 49% of total lending in February to 46% in March, with a corresponding increase in further advances.

Within loans for house purchase, the proportion made to first-time buyers rose in March to 32%, up from 29% in February.

That equated to an estimated 22,000 loans.

The pricing of fixed rate products fell a little in March – to 5.46% from 5.55%.

Variable rate pricing remained stable at 5.92%. Take-up of fixed rate products remained at around 40% of the total.

Michael Coogan, CML director general, says: "The market remains stable, and on course for the steady 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."