Mortgage lending is lowest since 2002House purchase loans slump as credit crunch bites
15 October 2008
Mortgage lending is at its lowest level since 2002 according to new data.
There were just 42,200 house purchase loans, 15,600 of them to first-time buyers, in August according to the Council of Mortgage Lenders.
At £6bn, house purchase lending was 63% lower than in August 2007. Both the number and value of house purchase loans were the lowest since the council began collecting monthly data in January 2002. Which? has a mortgage calculator to help you find the best deals.
First-time buyers accounted for just under a third of total house purchase lending at £1.9bn. The typical advance to a first-time buyer fell to £106,754, the lowest since May 2006, reflecting both falling house prices and a further tightening in lending criteria.
First time buyer mortgages
First-time buyers typically borrowed 84% of the value of the property and 3.18 times their income, down from 90% and 3.39 in August last year.
There were 26,600 loans to home movers worth £4.1bn, down 61% in volume and 64% in value from August last year. The typical home mover advance was £126,000, the lowest since June 2006.
There were 74,000 loans for remortgage worth £10bn, down 20% in volume and 9% in value from August 2007. This is the lowest level of remortgaging volume and value since March this year.
The proportion of borrowers choosing tracker rates increased from 28% in July to 31% in August. While the majority of borrowers (58%) still opted for a fixed rate, this has declined from 64% in July.