Mortgage interest payments at 35-year low

12 July 2010 0:00 am | Updated: 12 July 2010 11:47 am | By Paul Thomas

It also says house purchase lending rose for the eleventh consecutive month, but this is likely to tail off in the second half of this year due to the challenging economic backdrop, Government spending cuts and tax increases.

House purchase lending was up two per cent in volume and three per cent in value on April, with 42,000 loans worth £6bn completed in May.

Remortgaging activity also increased. The 26,000 loans completed, which were worth £3.2bn, were up six per cent in volume and 10 per cent in value. However, volume and value in May were down 14 per cent on a year earlier.

There were 14,800 loans, worth £1.8 billion, advanced to first-time buyers in May, up from 14,500, worth £1.7 bn, in April and 13,700, worth £1.5 bn, in April 2009.

The numbers of home movers increased as well in May. The 27,100 loans, worth £4.2bn, were up from 26,500, worth £4.1bn, in April and 22,800, worth £3.2bn, in May 2009.

CML director general Michael Coogan (pictured) says: “House purchase lending continues its recovery but positive comparisons with equivalent months a year ago look unlikely to continue. Activity picked up in the second half of 2009 due to the stamp duty holiday but with the government’s austerity drive picking up momentum we are unlikely to see a repeat of those buoyant numbers this year. Our forecast for gross lending in 2010 may now be looking a little optimistic.”

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