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Mortgage lending increases during May

Mortgage lending increases during May

Category: Mortgages

Updated: 29/06/2010
First Published: 29/06/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The value of mortgage lending to UK consumers increased during May, although the numbers of homes actually purchased fell slightly.

Figures from the Bank of England show that the number of mortgages approved for residential house purchases amounted to 49,815 last month, a very small fall from April's figure of 49,828.

While short of the previous six-month average of 51,856, more houses were sold in May than in January, February and March this year.

The high average was driven by buyers rushing through their mortgage agreements before the end of the stamp duty holiday at the end of last year, when the number of mortgage approvals climbed to 59,521.

Total lending for home purchase, remortgaging and other purposes increased by £1.2 billion, up from April, when a rise of £1 billion was recorded.

However, remortgaging levels remain low, as existing homeowners are reluctant to move from the lenders' standard variable rates, which are favourable compared to other mortgages on the market.

The number of loans approved for remortgaging ended May at 25,759, lower than April and the previous six month average.

Amongst the best two year fixed rate mortgages currently available are a deal from The Co-operative Bank at a rate of 2.95% and a deal from HSBC at 2.99%.

Yorkshire BS also offers a two year fixed rate mortgage deal at 3.05%.

Those confident that the base rate of interest will not stray too far from its current historic low point of 0.5% may want to take out a variable rate mortgage.

Amongst the best on the market is HSBC's 2.39% tracker, while ING Direct offers a rate of 2.84% for the term.

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