Loans for remortgages increased from 25,000 in August to 29,000 in September, but remain low against last year.
Figures from the third quarter reveal that remortgage loans rose only by 6% in volume and 5% in value from the previous quarter, a drop of 20% in volume (and 19% in value) from Q3 in 2009.
The Council of Mortgage Lenders (CML) said that there was still little incentive for borrowers to move away from low reversion rates with interest rates remaining low.
It added that it does not expect to see a significant rise in remortaging over the coming months, as borrowers struggle to access refinancing deals.
The CML data also revealed that loans to first-time buyers had increased by 4% in September to 18,600, but this was still 6% lower in volume and 4% lower in value, compared to September 2009.
Jonathan Moore, director of easyroommate.co.uk, said: “With first-time buyers having to stump up even greater deposits, we are seeing a growing number of them remaining in rented accommodation like flatshares. This is driving up the number of would-be tenants competing for a place to live.”
He added: “Mortgage finance conditions are unlikely to loosen up any time soon, therefore rental accommodation will remain vital to housing the UK’s growing population.”
The data revealed that the number of home mover loans fell by 2% to 31,600 in September, following a 10% fall in August. The value also fell by 2%, from £5.3bn to £5.2bn.
Michael Coogan, CML director general, said: “With lending volumes at historic lows, stability in the mortgage market is the name of the game at the moment. With both consumer demand falling and funding capacity limited, neither supply nor demand looks likely to feed through to any significant improvement in lending volumes as we head into winter.”
