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Purchase lending recovers as multiples rise

The Council of Mortgage Lenders says mortgage lending saw another big rise in July with gross advances totalling £25bn, 12 per cent higher than in June.

The CML says there appears to be signs of recovery in lending for house purchase, which reached its highest since August last year. It totalled £11.6bn in July from £9.7 bn in June, a rise of nearly 20 per cent.

Remortgaging stayed strong in July at £10.7bn, 5 per cent higher than in June, despite accounting for 43 per cent of all lending compared with 46 per cent last month.

Fixed rates continue to increase in popularity, accounting for 55 per cent of lending in July, up from 53 per cent in June and 22 per cent a year ago. The average fixed rate was 4.12 per cent, compared with an average variable rate of 3.96 per cent.

The CML says all buyers are borrowing higher income multiples than they were a year ago. Although this is offset to an extent by lower interest rates, the general consensus is that rates are likely to rise next year.

CML director general Michael Coogan says: “July&#39s figures support the picture of a housing market that remains stronger than expected but the risks of a correction have not gone away and borrowers should remain wary of overcommitting themselves.”


Causing offence

I was absolutely fascinated by the letter from the “non-churning IFA”. It seems to me to be thoroughly unethical for so-called IFAs to take large chunks of commission on policies which are then going to be converted without penalty. In any event, I think it is obscene to take 5 per cent commission on the […]

July sees increase in mortgage lending

BBA figures show that gross mortgage lending increased to £16.9 billion in July, up 13 per cent from June and 16 per cent from July last year. The BBA says that there were 281,500 mortgage loans approved in July, 10 per cent more than in June and 19 per cent more than in July last […]

Kick out churners

The letter from a “non-churning IFA” struck a chord with me (Money Marketing, August 7). I expect that most of your readers will know of at least one adviser that has been churning in the 1 per cent world. Presumably, most product providers have been funding such behaviour from their with-profits reserves, which must now […]


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