Remortgaging on the up

Gross mortgage lending hit a new record level in June, reaching £32.2bn, according to data from the Council of Mortgage Lenders (CML). This is higher than the May 2006 record of £29.1bn.



Remortgaging in May grew by 17% compared with the same month last year, according to data from the CML's regulated mortgage survey (RMS). Month on month, remortgaging increased by 25% in May to 99,000 loans from 80,000 in April. Remortgaging accounted for 38% of all loans - up by 2% on the previous month. The CML says that the leap in remortgaging reflects the re-financing of a high number of fixed-rate deals which have now come to an end.



Lending for house purchase was also robust in May, increasing by 13% on last year. The survey found that within lending for house purchase, the number of loans to first-time buyers increased by 7% to 33,700 from 31,400 in May 2005. But lending to home-movers in May far outstripped this figure, growing by 16% to 59,000 loans, from 50,800 in the same month last year.



Michael Coogan of the CML said: "The risk of an interest rate rise is more real than earlier in 2006, which may moderate demand towards the end of the year."



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