Constant Fluctuations in the Mortgage Market

There are continuous fluctuations in the mortgage market this summer following an 8 percent increase in the lending between the months of June and July.

Based on the data from the Council of Mortgage Lenders (CML), the loans for home buyers and remortgages increase to £12.7 billion in July, which is it’s a record high since September and is up by 2 percent in the same period of the previous year.

The overall market was generally invariable, although the lending figures fluctuated due to distortions brought about by one-off events, like the Olympics and the Diamond Jubilee.

Meanwhile, according to CML, they still cannot confirm whether or not the recently released £80 billion Funding for Lending plan has motivated banks to lend more to hopeful homeowners.

Caroline Purdey, CML market and data analyst, said that they are looking forward to September figures because the effects of the Olympics and Diamond Jubilee are already insignificant.

However, Mark Harris, the chief executive of SPF Private Clients, cautioned that any constant recovery in the housing market is still a long way to go. Moreover, Harris said that the ongoing eurozone crisis, the focus on Olympics, and the low consumer confidence might lead to a slight decrease in transactions over the next two months.

In the past few weeks, there have been several inexpensive five-year fixed-rate deals released. This has been considered as an answer to the Treasury and Bank of England’s lending scheme. Its objective is to improve the economy by allowing credit to flow to home owners and businesses.

Earlier, a lot of homeowners had been glad to remain on their lender’s standard variable rates after mortgage deals expire. However, remortgaging is currently anticipated to increase. Moreover, the deals have been mostly intended at borrowers who can pay huge down payments and there are doubts that the scheme will not succeed in improving lending to first-time buyers.

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