Mortgage apps soar 21.2pc in 2011

Yuan Phoon

January 18, 2012

In December 2011 mortgage applications were 20.2% higher than the corresponding month in 2010 but applications fell 43.1% compared to November 2011.

MAB said the dip was seasonal as people concentrated on the festive period rather than their finances.

The percentage of applicants choosing a fixed rate deal increased from 70.9% to 75.8% from 2010 compared to 2011.

The average loan size on mortgage applications over the year also increased to £132,747 which was 4.62% higher than the average in 2010 of £126,888.

The average age of mortgage applicants reached 39 in December, the highest level since MAB began its monthly National Mortgage Index.

Remortgage activity was also hit by the seasonal slowdown with the number of cases down 39.1% in December compared to November.

Compared to December 2010, remortgage applications were 55.2% higher in December 2011.

The average LTV on remortgages in December increased from 58.7% compared to 56.5% in November.

Regionally the average mortgage size in December 2011 was highest in London at £251,191 and was lowest in Wales at £84,159.

In the same month average LTVs were highest in Yorkshire and Humberside at 79.6% and lowest in London 65.9%.

Brian Murphy, head of lending at MAB, said: “The wider economic uncertainty continues to weigh on house buyers and therefore, not surprisingly, those borrowers who are committing to buy continue to gravitate towards fixing their mortgage payments with three out of every four borrowers electing to fix.

“Average two, three and five-year fixed rates are all lower than twelve months ago with average rates falling by 0.13%, 0.49% and 0.71% respectively. Average two-year trackers are down by a smaller margin having been at 3.46% in December 2010.”

Murphy added that lenders had pulled back a little on the number of products available during December with a 5% decline in deals from 7,500 in November to 7,150 deals in December.

He said: “Lenders continue to support the market particularly with products for first-time buyers.

“Both Woolwich and Nationwide re-entered the 90% loan-to-value market late in 2011 and other providers, such as Accord with a 90% LTV deal and Newcastle Building Society with a 95% deal, have re-entered the market early in 2012.

“This has added further competition and choice and both first-time buyers and those with smaller deposits and/or little equity should see their opportunities to access the market continue to improve.”

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