February Sees Home Loan Rise

Fri, 16 Apr 2010

New figures from the Council of Mortgage Lenders (CML) have revealed a 12 per cent increase in the number of home loan approvals in February. Following a dismal January – largely due to the rush to obtain mortgages in December to beat the return in January – mortgage approvals rose to 35,000 in February, with new home loans worth a total of £5 billion. The figures demonstrate the continued recovery from recession, as 49 per cent more borrowers take out loans compared with the same month in 2009, while the value of loans taken out has risen by 67 per cent over the same period.

Caution continues to pervade the approach of banks and lenders, meaning interest rates remain largely unfavourable. With rates still expensive, it is perhaps unsurprising that the number of remortgages grew by just 2 per cent in February.

Meanwhile, the CML warned that the stamp duty holiday and the effect of the cold weather make trends difficult to discern at present. It is clear, however, that property prices have risen compared with the same period of 2009. The average increase stands at 7.4 per cent, though first time buyers are having to pay 9.3 per cent more than they were in February 2009.
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