Council of Mortgage Lenders Warns Home Loan Market Recovery is Some Way Off

Mon, 14 Jul 2008

The Council of Mortgage Lenders have issued a stark warning to homeowners that a recovery in the housing market remains ‘some way away’. There have been some slight suggestions of a recovery in recent months, with the 52,700 loans for home purchases in May up by 4 per cent on the previous month, and the number of loans to first time buyers also up by 4 per cent at 19,200. However, those figures are significantly down on the previous year, by 44 per cent and 41 per cent respectively. Furthermore, remortgage levels took a serious hit in May, with a 14 per cent drop on the previous month and a 23 per cent decrease on the previous year.

The Council of Mortgage Lenders pulled no punches in their estimations, predicting that the situation will ‘get worse before it gets better’. The predictions were accompanied by the news that annual house price growth had slowed for the seventh consecutive month, from 4.9 per cent in April to 3.7 per cent in May.

The new figures demonstrated that fixed rate mortgages have become increasingly popular in the wake of the rising interest rates, with fixed rate mortgages accounting for 66 per cent of all new loans in May, up by 7 per cent on the previous month.
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