Remortgaging rose and lending for house purchase held steady in July, by comparison with June, although loans to first-time buyers continued to decline according to the latest survey from the Council of Mortgage Lenders (CML).

There were 47,400 house purchase loans worth £7.1 billion, unchanged from June; this represents a 51% fall by volume and 54% by value from the same month last year. There were 85,000 remortgage loans worth £11.9 billion in July, up 14% in volume and 16% in value from June.

The number of loans to first-time buyers declined to 17,300 in July, down 5% from June and 48% from July 2007. Loans to first-time buyers have declined in the face of tighter lending criteria, as well as the wait-and-see approach now evident in an environment of reduced house prices. The average first-time buyer had a deposit of 15% in July, up from 13% in June, bringing the loan-to-value ratio down to levels not seen since the early 1980s. First-time buyers typically borrowed 3.24 times their income, down from 3.33 in June and the lowest multiple since July 2006.


CML Director General, Michael Coogan, said: "Tighter lending criteria have clearly made it more difficult for first-time buyers to enter the market. The stamp duty and shared equity measures announced by the government last week will be helpful to those first-time buyers looking to enter now, but many may be waiting for house prices to stabilise.

"Restoring the flow of funding to the mortgage market is crucial to helping the housing market recovery and we look forward to the findings of the Crosby Review at the end of the month."

(CD/NS)