REMORTGAGE lender LMS called for an extension to the funding for lending scheme (FLS) yesterday after February showed a deep drop in remortgage lending.
Households drew £2.6bn of equity out of their houses in February, LMS figures showed, down 11.3 per cent compared to January, falling faster than overall mortgage lending.
The number of loans fell even further, by 12.4 per cent, from 20,332 in January to 17,812 last month. This meant there were 7.9 per cent fewer remortgage loans than in February 2012, together worth 1.8 per cent less.
“February’s monthly 11.3 per cent dip in remortgage lending can at least partly be attributed to a lull in remortgage applications over the Christmas and New Year Period,” said LMS boss Andy Knee.
“However, the fact that it was still annually down by 1.8 per cent suggests that the FLS still needs more time to bed in and we urge the government to continue with the scheme in its current form.”
Without an extension, FLS will expire 18 months after it began, at the beginning of February 2014.