Despite the new Mortgage Marketing Review and the new guidelines that require borrowers to openly share more detailed information concerning their spending and saving habits to gain approval for a mortgage or remortgage, buyers and homeowners are still showing strong demand for deals offered from lenders.  According to the Council of Mortgage Lenders the top demand is from first time buyers and home movers.  Most experts see this trend continuing strongly due to low interest rate mortgages and cheap remortgage deals.

First time buyer mortgages increased 1% in April from March and were 37% above the number in April 2013.  Lending value increased by 3% from March and is 52% higher than April 2013.  Home movers took out loans by an increase of 11% in April from March with an increase of value by 15%.  In a yearly comparison with April 2013 volume was up 30% and value increased by 47%.

Remortgage loans increased by 6% in April from March and the value of remortgages increased by a value of 11% in April.  Rising house prices have contributed to higher equity levels for homeowners and remortgages have allowed a release of cash to help budget tight homeowners as well as offer them an opportunity to lock into a low interest rate.  There were 26,300 remortgage loans advanced in April which was 6% higher than in March.

There has been talk of the problem with rising house prices and the hopeful normalizing of the market without the need to raise interest rates.  According to CML data, first time buyers increased their mortgage to income ratio in April with first time buyers borrowing 3.42 times their gross income compared to 3.41 in March.  The average loan value for first time buyers increased as well to £121,500 in April, up from £118,750 in March.

Paul Smee, director general of the CML, said, “First time buyers and home movers continue to be key drivers in the growth of the market and, despite fears that MMR preparations may hinder this momentum, we have seen a continued year on year upward trend every month in 2014. 

“The UK picture continues to mask a disparate set of varied local conditions, but overall we expect lending levels to continue to build on the foundation of growth we have seen over the past 12 months.”