CML Predicts Stable Mortgage Market

The Council of Mortgage Lenders (CML) is predicting a stable mortgage market for the rest of the year as figures show mortgage lending increased slightly in May.

If you’re looking for a mortgage, you’ll be pleased to know that the Council of Mortgage Lenders is forecasting a positive outlook for mortgage lending this year.

New figures show that lending was up slightly in May and the CML has predicted a stable market for the rest of 2011 with a seasonal increase in lending likely in the coming months.

Lenders advanced 41,500 loans for new purchases in May, up from 40,800 in April, though both months’ lending had approximately the same value of £5.9 billion. While this is a slight uptick in lending, it’s also fewer than the 43,800 loans made in May last year and lending volumes continue to be weak in historic terms.

Remortgaging was also up – 29,000 loans were issued in May compared to 24,700 in April – and lending to first-time buyers remained almost unchanged with 15,900 loans advanced in May compared to 15,800 in April.

First-time buyers are also putting up smaller deposits, with figures showing they borrowed an average of 80% of their home’s value compared to 75% through 2009 and early 2010.

Thanks to the Bank of England maintaining the base interest rate at its historic low, the majority (62%) of borrowers had fixed-rate mortgages in May.

Moneyhighstreet comments: “Stability is good news for borrowers, but lending is still historically very low, making it harder for people to secure the loans they need to get on the housing ladder.

“If you have a large deposit, now is a good time to take advantage of low fixed rates and more affordable properties in many parts of the country.

“There is hope for first-time buyers, however, with smaller lender targeting renters with attractive 95% mortgages as the costs of renting rise.”