Both first-time buyers and home movers are benefiting from the lowest debt servicing costs since 2004, according to the latest monthly lending survey from the Council of Mortgage Lenders (CML).
Remortgaging, on the other hand, still accounted for a higher number of loans in March, but the number was only 8% higher than in February and 45% lower than in March 2008.
The CML says it expects remortgaging to remain muted as a result of attractive reversionary rates automatically cutting in for many borrowers as they come out of their existing deals, and less opportunities for those with reduced levels of equity because of falling house prices.
Within house purchase lending, first-time buyers accounted for an increasing share of 40% of loans, up from 38% the previous month. This was the highest proportion since April 2005, although the absolute number of first-time buyers remained low at 12,500, up from 9,200 in February but well below the 17,800 recorded in March 2008.
Bob Pannell, head of research at the CML, comments: "Because the flow of lending is still constrained, there is a sharp dividing line in the housing and mortgage markets between those who can raise a substantial deposit and those who can not.
"For those who can, the burden of debt payments is low and mortgage interest is consuming proportionately less income than for a number of years. This is good news for now. Even so, a mortgage is a long term commitment. People borrowing now should be mindful of the years ahead when interest rates eventually rise, as they will.
He adds: "But for those without substantial deposits, entering the market is still both difficult and uncertain. While there are some signs of demand increasing, house prices remain weak and lending criteria inevitably remain inherently conservative as lenders necessarily seek to rebuild their capital position."
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Still 66% women in lower quartile
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