Mortgage sales to stay slow

The mortgage market will continue to slow, according to mortgage intermediary Charcol.

16:25 21 December 2004

The mortgage market will continue to slow, according to mortgage intermediary Charcol.

Ray Boulger, senior technical manager for Charcol, was speaking after the Council of Mortgage Lenders and Building Societies Association both recorded a slowdown in mortgage lending.

"There was little surprise in the lending figures this month, with the purchase market continuing to slow," Mr Boulger said.

"What is interesting is that remortgaging continues to keep the market ticking along. Again, this is unsurprising as the numbers reflect the very competitive remortgaging products that were available in the run up to November, when the applications that represent these figures will have been made.

"The December and January lending figures are likely to remain subdued, reflecting both seasonal influences and the soft purchase market.

"However, we expect 2005 to kick off with lenders competing very hard to secure a good early start to the year, resulting in some very competitive products flooding onto the market."

Mr Boulger said this is partly because in the run up to statutory regulation, and immediately after, many lenders deliberately reduced volumes while they concentrated on getting their systems compliant.

"In addition, the general industry expectation that 2005 gross and net lending will be close to 10 per cent below 2004 levels means that those lenders planning to increase, or even maintain, their lending in 2005 will need a good foundation to the year," he added.