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CML: Remortgage lending gains momentum

There were 26,600 remortgage loans advanced in March 2015, an increase of 19% from February and 6% from March 2014.

The buy-to-let market also continued its promising start to the year, as there were 18,200 buy-to-let loans in March, an increase of 12% on the previous month and 21% year-on-year.

However lending to both first-time buyers and homemovers fell by 3% compared to March 2014.

Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said: “Today’s CML data indicates the early momentum for 2015 clearly rests with the remortgage market.

“The fact that people are staying put for longer and mortgage pricing is at record lows gives people added incentives to reassess their existing loans, and should help to bring the remortgage market further out of its slumber.”

The results signalled worrying times for first-time buyers said the Mortgage Advice Bureau’s head of lending Brian Murphy. He added: “The new government has absolutely no time to waste in introducing its new proposals to help first-time buyers – but the reality is it will take much more than Help to Buy ISAs and a limited number of starter homes to address the challenges faced by aspiring buyers on modest incomes.”

Things all doom and gloom, as industry commentators pointed out how year-on-year comparisons took place before the Mortgage Market Review came into force from April when the market was extremely buoyant.

Williams said: “We are still in a transition period where year-on-year comparisons of lending activity hark back to the time before the Mortgage Market Review was implemented.

“This undoubtedly has a distorting effect and means the annual drop in purchase activity should be treated with caution.”

He added: “All the same, there is no denying that regulatory creep over the last 12 months has had a subduing effect on the market and left a big question mark hanging over the potential for it to regain its previous momentum. Indeed MMR is designed to bite harder the more active the market becomes.”

David Copland, director of TMA, said: “I am not surprised to see that lending was down in the first quarter of 2015 compared with 2014, as the Help to Buy schemes had kicked in at the end of 2013 and we had a buoyant market up to the implementation of the MMR in April 2014.

“I expect to see the mortgage market kick on during the balance of the year now that we have certainty over the next government, with a slowing down towards the end of the year and into 2016 as lenders and intermediaries prepare for the implementation of the European mortgage credit directive, which includes the integration of second charges into MCOB.”


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