The proportion of mortgage lending used for home purchase has fallen 12% in the last six months, according to Hamptons International Mortgages.
However, the proportion of remortgages has grown significantly over the same period, indicating borrowers may be remortgaging their current properties, rather than moving in a period of house price volatility.
Research conducted by Hamptons shows the amount of lending for home purchase fell 12% compared with the six months to March 2007, to 30.29%, and fell 5% between August and September.
Remortgages have risen by 9% since March to 28% and increased by almost 10% between August and September.
Jonathan Cornell, managing director of Hamptons Mortgages, comments: “The clear disparity in the directional change of purchase and remortgage lending during September is interesting, and offers potential evidence to support recent reports of a slowing housing market, as less people choose to take out mortgages on new purchases.”
Hamptons’ research also found remortgagers were considerably reducing the amount of money they borrowed, with average LTV’s falling from 65.81% in August to 49.01% in September. Tracker mortgages also became more popular as borrowers hope for a fall in interest rates in the coming months.
“Remortgaging has increased considerably since August 2007, yet borrowers are remortgaging at a lower LTV and are choosing variable over fixed rate deals; suggesting people’s thoughts are still up in the air and decisions are being taken cautiously,” adds Cornell.
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