July Mortgage Figures

Figures released by the Council of Mortgage Lenders (CML) for the month of July show that the popularity of fixed-rate mortgages has risen, and they now account for half of all mortgages taken out during that period, a three percent increase over the month of June.

The growth of lending slowed during July, this can largely be attributed to borrowers putting off taking out their loan until after the widely anticipated cut in rates that was correctly predicted for August.

Total mortgage lending among the members of the British Banking Association (BBA) rose by £3.7bn for the month of July, however this was down on the £4.7bn rise seen in the month previous, as suggested above, this could be a result of consumers waiting for the expected base rate cut.

The costs of mortgages fell during the period in question, with the average rate of interest on a fixed rate mortgage being 5.31% compared to 5.36% in June, variable rate mortgages saw a similar fall, with them being 0.8% lower. These reductions could be partly down to some lenders reducing their rates during the latter stages of July in anticipation of the cuts made in the beginning of August.

Despite the falling costs of mortgages in terms of their interest rates, first time buyers still only account for a small percentage of those taking out mortgages, with them making up just twenty-nine percent of the total mortgages for July. It would appear that even though mortgages have become cheaper, it is the high house prices that are the limiting factor for potential first time buyers, putting the deposit amount out of many people’s reach.

At present, the mortgage and housing markets appear to be remaining stable, albeit at a slightly lower mark than they were previously at, stability that many experts in the house market believe will continue.