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House purchase loans hit two year high

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The number of loans for house purchases has reached the highest level seen since Decmber 2007 as 55,000 deals are agreed, according to new research.

The Council of Mortgage Lenders (CML) has found that the amount of buyers increased by 140% since January this year, when only 23,000 loans were advanced.

Fixed mortgages are continuing their downward trend from a high in July, when 80% of all new loans taken out were fixed, to 66% in October. And Tracker mortgages are on the rise with 21% of all new loans being trackers, compared to July’s low of 12%.

But the apparent increase has not touched the remortgage market, with only 33,000 remortgaging loans, the lowest level since 2002.

“We are still in a two-speed mortgage market. It appears that low interest rates for those with substantial deposits, coupled with this year’s sustained increases in house prices, are encouraging more people to buy or move home,” said CML Director General, Michael Coogan.

“But the same low interest rates that are driving house purchase activity provide little incentive for borrowers to refinance their loans. This, coupled with ongoing tightness in lending criteria, continues to hold back the remortgage market.”

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Written by Andrew Hodges

December 20, 2009 at 10:48 pm

Posted in Comment, LinkedIn

Tagged with , ,

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