Remortgaging rose 16 per cent in March – 17 per cent over the year – as borrowers took out new home loans against a background of fears of an interest rate rise. Some 33,900 remortgage loans were taken out, according to the Council of Mortgage Lenders.
Remortgaging accounted for 37 per cent of all lending during the first quarter of the year, up from 30 per cent during the last three months of 2010. But the increased activity will not help the mortgage market to climb out of its current doldrums, warned Michael Coogan, the CML director general.
"Over the first quarter of the year as a whole, the picture was subdued and that is unlikely to change for the foreseeable future," he said. "Looking ahead to lending figures in the coming months, the Easter, royal wedding and May bank holidays will impact on the level of activity."
The number of loans advanced for house purchase in March actually increased by 24 per cent to 37,800 from February. However, house purchase lending activity is still below the levels seen at the same time last year – down 17 per cent. Significantly, house purchase lending fell 26 per cent in the first quarter.
"The mortgage market is still treading water," said Jonathan Moore, a director of Easyroommate.co.uk. "The ongoing lack of mortgage funding has compounded a miserable spring for first-time buyers, who are already struggling against unaffordably high house prices and spiralling living costs."