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16 January 2012

November mortgage lending revival

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by Gill Montia

November mortgage lending revival

Mortgage lending rose in November, for only the second time in 2011.

According to the Council of Mortgage Lenders (CML), loans for house purchases totalled 47,000 with the figure up 4% on a month earlier and 3% on a year earlier.

First-time buyers took out 17,300 home loans, up 4% on both October 2011 and November 2010.

First-time buyers also continued to see a decline in the proportion of their income diverted to mortgage interest payments: 12.2% in November compared to 12.3% in October.

Home mover volumes increased by 5% in November, compared with October, and by 2% from a year earlier.

Remortgaging volumes also increased, with 31,200 loans approved, up from 29,500 in October and 30,700 the previous November.

The CML’s figures also show a rise in the popularity of the fixed-rate mortgage, with 65% of all borrowers opting for a fix in November, the biggest proportion in two years.

Repayment mortgages were chosen by the vast majority of borrowers as follows: 98% of first-time buyers; 83% of movers and 79% of remortgagers.

Commenting on the figures, CML director general, Paul Smee, says: “A rise in mortgage lending towards the end of 2011 is a welcome indicator for the industry considering confidence has been weak due to fragile economies both at home and in the Eurozone.”

He adds: “We should expect a further increase in first-time buyer activity over the next few months as they push through their purchases to take advantage of the stamp duty concession before it ends in March.”

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