Remortgaging? Don't bank on it.

House market keeps stalling

Published:  24 May, 2010

LONDON: Hopes of a springtime recovery in the housing market are fading as new data shows bleak prospects for homeowners.

New figures show mortgage approvals for house purchases in April were at their lowest level for a year with lenders warning that their own difficulties accessing cash were making it hard to offer mortgages to homebuyers.

Data from the Bank of England shows that about 14% of all households with a mortgage, equal to about 1.5m households, have less than 10% equity in their property. That is too little to allow them to reduce their outgoings by refinancing on more attractive terms, even if these were available.

This is more than twice the roughly 600 000 households that the Council of Mortgage Lenders estimates are in negative equity owing more to their bank than their homes are worth.

The council said its members, who make about 94% of all the mortgage loans in Britain, are facing higher costs as they compete for retail deposits to replace maturing wholesale loans. This is likely to mean that rates on mortgages may have to rise even if the bank rate remains on hold.

The latest data, from the Bank's monthly Trends in Lending Report showed that remortgage activity in April totalled £2.8bn, the lowest it has been since the beginning of the crisis and that net lending, after repayments, was below £1.0bn for the first time in that period.

Sign Up

For the Builders' Merchants News enewsletter.

In the spotlight


Builders Merchants Vacancies – UK Wide

At Arco, we are an industry specific recruitment consultancy, providing sales and managerial staff Nationwide to Merchants, Distributors and Manufacturers of Building Materials within the Construction Sales Sector. Priding ourselves on our unparalleled customer service and hard work, we offer a fresh, innovative and personal approach to recruitment specifically designed to meet our clients’ needs and candidates’ skills.

Guest Blog by Simon Damp

Is DIY a lost art?

As time goes by, the art of do-it-yourself when it comes to activities around the home and garden is fast becoming more and more of a lost art.