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Tuesday 6th January 2009
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FRIDAY 19TH AUGUST 2005
 SWING TO FIXED RATE AS LENDING LINGERS

As a proportion of all loans, fixed-rate products increased to 50% from 47% last month, the highest proportion since December 1998, said the Council of Mortgage Lenders yesterday.

The average pricing of fixed-rate products declined for the ninth consecutive month to 5.31% from 5.36% in June.

The pricing of variable-rate products fell for the seventh consecutive month to 5.68% from 5.76% a month earlier. Variable-rate products as a proportion of loans also fell to 49% from 53% in June.

Lending for house purchase decreased slightly in July to £11.8 billion, from £12 billion in June. This figure is 19% lower than the £14,600 billion this time last year.

The proportion of mortgage lending for house purchase remained static in July at 47% and the proportion of loans going to first-time buyers and movers also remained the same, at 29% and 71% respectively.

Remortgaging saw a slight increase (£200 million) to £10.3 billion. Remortgaging as a proportion of total lending also increased to 41% from 39% in June.

"The housing market has started to stabilise at a new lower level," said CML director general Michael Coogan.

"The recent 0.25% cut in interest rates by the Bank of England should help ensure that this stability continues over the coming months by giving a much needed boost to consumer confidence about future interest rates," he said.


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