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Mortgage market ‘stuck in a rut’

Mortgage market ‘stuck in a rut’

Category: Mortgages

Updated: 18/03/2011
First Published: 18/03/2011

MONEYFACTS ARCHIVE
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the mortgage market is 'stuck in a rut' with lending barely changed from the same point last year.

Figures from the Council of Mortgage Lenders (CML) show that mortgage lending in February was an estimated £9.5 billion – almost identical to the January figure of £9.475 billion.

Lending last month was just 1% higher than in the same month in 2010.

A number of factors have hampered the market over the last 12 months, including a slow in first time buyer numbers, constraints on access to credit and sellers refusing to budge from their asking prices.

The CML revealed that while lending remains weak overall, stronger remortgage activity has continued in the early months of 2011.

The possibility of a rise in the Bank of England's base rate has seen many homeowners look to fix their repayments before an increase is officially announced.

While there has been a slight pick-up in buyer demand in recent week, levels are still weaker than they were a year ago.

This is despite the fact that there was a lull at the start of 2010 following the end of the stamp duty holiday at the end of 2009.

"There is little in the latest batch of market data that would cause us to revise our market forecasts for 2011, and nothing that alters our underlying view that this is going to be a challenging year for households and the housing market," said Bob Pannell, chief economist at the CML.

"The housing market remains stuck in a rut and, while we do not anticipate much relief in next week's Budget, it does present an opportunity for the chancellor to address the reform of stamp duty."

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