Outlook for housing market uncertain as remortgaging falls to ten-year low

THE days of excessive mortgage lending seen prior to the credit crunch will not return, the Council of Mortgage Lender’s (CML) director-general, Michael Coogan said yesterday, as its latest figures showed remortgage activity had fallen to its lowest level in over a decade.

August saw 25,000 remortgages advanced by lenders, accounting for 25 per cent of all loans made in August. The number of loans was down 13 per cent on the previous month and 19 per cent lower than a year ago.

The total number of mortgages fell eight per cent in August to 51,600. Of those around a third were loans to first time buyers, a decline of five per cent from July most likely the result of tighter lending criteria and higher deposit requirements, which remain on average above 20 per cent.

The comprehensive spending review would further dampen consumers’ appetite to borrow this year, said Coogan.

He added he expected lending to slow significantly towards the end of the year while the outlook for 2011 was “uncertain”.