It has been claimed that the mortgage lending sector for the month of August was largely propped up by first time buyers.
The month saw a drop in the number of people looking to remortgage, but there was a return to the market – albeit a gradual one – of first time buyers who helped to keep the sector buoyant.
According to the Council of Mortgage Lenders there was an increase of 29 percent in new mortgage lending in August compared to the same period last year.
One official from the CML said that property purchasing was definitely back on a stronger footing even though recovery of the property market would be a gradual and drawn out process.
He said: “It will be a drawn-out recovery process, with seasonal ups and downs, but house purchase activity is now on a firmer footing.” The CML figures did show that remortgaging acticity remained weak at present.
The reports also showed that many people are now coming to an end of their fixed rate mortgage deals, which many took out for two or three years when interest rates were on the increase in the hope of protecting themselves against soaring repayments. However, interest rates have been at an all time low of just 0.5 percent for seven months, so many will be relieved that these higher rate fixed mortgages are coming to an end.
Industry officials have predicted that those whose fixed rate mortgages are coming to an end will shy away from remortgaging to another fixed rate deal for the moment, as the base rate is so low that they will want to benefit from the savings that are available on standard variable rate mortgages.
However, remortgaging activity may pick up later in the year when there is a greater threat of the base rate increasing again.
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first time buyers,
fixed rate mortgages,
mortgages
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