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Remortgages fall from new year&#39s record level

Despite a decline in remortgaging, sales of mortgages remained strong in February, according to the Council of Mortgage Lenders.

The monthly survey by the CML and the Depart-ment of Transport, Local Government and the Reg-ions reveals that remortgaging fell to £5bn from its record level of £5.6bn in January. It now accounts for 38 per cent of total lending, down from 42 per cent.

But the level of remortgaging is still higher than in February 2001, when it made up £3.5bn or 37 per cent of the market.

Gross lending declined to £13bn in February from £13.4bn in January but was up from £9.4bn in the same period last year.

Loans for house purchase rose slightly to £6.8bn from £6.7bn the previous month and accounted for 52 per cent of total lending.

Fixed-rate products declined slightly in popularity, comprising 37 per cent of new loans compared with 39 per cent in January.

The average interest rate paid by borrowers edged up to 4.7 per cent in February from 4.68 per cent in January. The average variable rate was 4.41 per cent compared with 4.39 per cent while the average fixed rate increased to 5.19 per cent from 5.14 per cent.

Director general Michael Coogan says: “Lending remained buoyant in February, even though remortgaging fell from January&#39s record figures. Rising house prices are continuing to make affordability a little more difficult for first-time buyers and former owner-occupiers but we still expect the rate of increase in prices to slow as the year progresses.”

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