Less people remortgage as housing market 'cools'

The number of people remortgaging their home in September fell to its lowest level in five years in a sign that the housing market is beginning to cool, new figures today indicated.

The Council of Mortgage Lenders (CML) said that that during the month 79,000 people remortgaged, down more than 13% on the previous month's total of 91,000.

People taking out a new home loan also fell in September, down to 88,000 from August's figure of 101,000.

Figures show that remortgaging accounted for 30% of the market by value in September - the lowest percentage since August 2001.

The sharp drop in the popularity of remortgaging reflects the fact that lenders are managing to retain more customers for longer by reducing the incentive to switch to other lenders, according to the CML.

But the drop in total mortgage lending could also be a sign that the property market is beginning to slow.

The number of loans to first-time buyers fell to 31,100 in September, from 35,200 in August.

Lending to home movers followed a similar trend, dropping from 66,100 loans in August to 56,700 in September.

Michael Coogan, director general of the Council of Mortgage Lenders, said: "The downward trends in remortgaging illustrate how lenders are reacting to competitive conditions and offering attractive retention products and policies to their customers.

"Today's figures show that slowly but surely the market is cooling as we approach the end of the year in an environment of higher interest rates."

Copyright Press Association 2006