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News: Remortgaging surges as fixed-rate deals wind up

Remortgaging in May grew by 17% compared to the same month last year, according to data released this week from the Council of Mortgage Lenders’ regulated mortgage survey (RMS).

Month on month, remortgaging increased by 25% in May to 99,000 loans from 80,000 in April. Remortgaging accounted for 38% of all loans - up by 2% on the previous month. The leap in remortgaging reflects the re-financing of a high number of fixed-rate deals now coming to an end.

Lending for house purchase was also robust in May, increasing by 13% on last year. The survey found that within lending for house purchase, the number of loans to first-time buyers increased by 7% to 33,700 from 31,400 in May 2005.

But lending to home-movers in May far outstripped this figure, growing by 16% to 59,000 loans, from 50,800 in the same month last year.

The survey also revealed that fixed-rate mortgage deals continued to be a popular option for many consumers in May. As a proportion of all loans, fixed-rate deals accounted for 72% - unchanged from April - but 16% higher than May last year. As fixed-rate loans mature, consumers are taking out new ones because they are attractively priced and allow people to plan ahead financially.

Commenting on today's figures, CML director general Michael Coogan said: "The robust growth of remortgaging and lending for house purchase in May reflect a growing and stable market. All the signs are that this will continue, although maybe at a slower rate."

"Lending to first-time buyers and home-movers is strong, and today's data reverses the dip in lending to these groups we witnessed in April."

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