Remortgage lending down 17 per cent

Overall number of mortgages also fell in May adding to claims of market cooldown

Remortgage lending fell 17 per cent to £3.3 billion last month, says a new report, down from the £4 billion in April reported by the Council for Mortgage Lenders.

The figures from Legal Marketing Services show the level is also down 15 per cent from last year, representing the smallest total since March 2013 which the report says provides 'further evidence of a cooling mortgage market across the UK'.

A report from the British Bankers Association also showed the overall number of mortgages approved by banks fell in May for the fourth consecutive month and down 3.5 per cent on the May figure for last year. Its chief economist Richard Woolhouse said that 'the heat appears to be coming out of the housing market'.

LMS also estimates that the number of remortgage loans fell by 19 per cent to 21,396 in May, down by more than a quarter compared to this time last year. On top of this, the average remortgage loan amount has also dropped to £155,448, a three per cent drop from last month. This is the first fall since October last year though still seven per cent higher than May 2013.

"Remortgaging continues to lead the market slowdown as lenders tighten their lending criteria, pre-empting any government cap to tackle concerns about an overheated mortgage market," said Andy Knee, Chief Executive of LMS.

"In some cases customers have been put off by the less competitive rates now on offer, as lenders raise rates to give themselves some breathing space as they get to grips with MMR. We expect remortgage lending to recover strongly in the months ahead when lenders fully adjust to the system, rates improve and a base rate rise finally happens."

Earlier in the week the Bank of England Credit Conditions survey indicated that demand for mortgages for house purchases had increased 'significantly' in the last three months, with lenders expecting a further rise in demand over the next three.

"This contradicts some other indices which suggest that the housing market is taking a breath," said Jonathan Harris, director of mortgage broker Anderson Harris. "Demand is still strong as buyers remain confident of their ability to get a mortgage and their perception that now is a good time to buy, with more stock coming onto the market."

According to Halifax, five year mortgages are becoming increasingly popular. More than two thirds of fixed rate mortgages in 2013 were for two year deals, but fixed rate mortgages for four to nine years, were the next highest (of which five year mortgages are most popular) and now account for a third of all fixed rate mortgages sales, up from just over a fifth in 2008.

Discover more property articles at Homes and Property
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Guru Careers: Tax Manager / Accountant

£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...

Recruitment Genius: Telesales / Business Development B2B - Year 1 OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: Several opportunities to join t...

Recruitment Genius: Systems Administrator

£20000 - £30000 per annum: Recruitment Genius: Working in a small, busy team s...

Recruitment Genius: 2nd / 3rd Line IT Field Engineer

£26000 - £30000 per annum: Recruitment Genius: This award winning IT Support c...

Day In a Page

A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms
What turns someone into a conspiracy theorist? Study to look at why some are more 'receptive' to such theories

What turns someone into a conspiracy theorist?

Study to look at why some are more 'receptive' to such theories
Chinese web dissenters using coded language to dodge censorship filters and vent frustration at government

Are you a 50-center?

Decoding the Chinese web dissenters
The Beatles film Help, released 50 years ago, signalled the birth of the 'metrosexual' man

Help signalled birth of 'metrosexual' man

The Beatles' moptop haircuts and dandified fashion introduced a new style for the modern Englishman, says Martin King
Hollywood's new diet: Has LA stolen New York's crown as the ultimate foodie trend-setter?

Hollywood's new diet trends

Has LA stolen New York's crown as the ultimate foodie trend-setter?
6 best recipe files

6 best recipe files

Get organised like a Bake Off champion and put all your show-stopping recipes in one place
Ashes 2015: Steven Finn goes from being unselectable to simply unplayable

Finn goes from being unselectable to simply unplayable

Middlesex bowler claims Ashes hat-trick of Clarke, Voges and Marsh
Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Atwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works