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Mortgage market still recovering

Mortgage market still recovering

Category: Mortgages

Updated: 13/04/2010
First Published: 13/04/2010

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Homeowners have been delivered some good news, after it was revealed the mortgage market continued its recovery in February.

The number of Find the best mortgage for you - mortgage loans advanced for house purchase increased by 12% during the month and were up 49% from a year earlier, according to the latest data from the Council of Mortgage Lenders (CML).

However, coming off the back of weak figures posted in January brought about by the end of the stamp duty exemption in December and the severe winter weather, the CML said the figures represented only a modest recovery.

Having rushed through their purchases before the stamp duty holiday came to an end, the dearth of first time buyers in January meant their numbers rose slightly faster than the rest of the market in February.

Meanwhile, with interest rates remaining pegged at their historic low of 0.5%, fixed rate mortgages continued to be less popular than in the recent past, accounting for just 47% of the market, the lowest share in around five years.

Unsurprisingly, the share of the market enjoyed by tracker rate mortgage deals remained at its highest level (36%) since the data began to be collected in March 2005.

"With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future, although the new stamp duty exemption for first time buyers could boost the market somewhat and we hope to see the traditional seasonal pick-up as the weather gets warmer and the days get longer," said CML head of research, Bob Pannell.

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