Despite a 2% drop between May and June, quarterly purchase applications were up by 58% compared with the second quarter of 2012.
June also witnessed the highest volume of remortgage applications since the financial crisis – 6% more than in May and 83% up on June 2012. Remortgage loan to values (LTVs) have shifted noticeably in the last year with the typical application now involving 5% less equity (59.6% LTV – June 2013 vs. 54.6% LTV – June 2012).
Competition continued to drive up product numbers in June with a 2% increase pushing this average ever closer to the 10,000 marker. At 9,887 the average number of products was the highest since November 2011.
Average fixed rates fell once more in June: apart from a solitary rise of 0.06% in the average three year fixed rate between June 2012 and July 2012, average two, three and five year rates have either held firm or fallen every month for the last year.
The average three year rate fell by 0.07% to 4.06% from May to June while average two and five year rates each fell by 0.08% to 3.74% and 3.88% respectively. June’s average five year rate was more than a full percentage point lower than a year ago (-1.02%) with the average two year rate (-0.98%) and three year rate (-0.90%) close behind.
For anyone taking out a £150,000 mortgage over a 25 year term, the rate changes over the last year equate to a saving of £3,412 over the lifetime of a two year fixed deal, £4,625 for a three year deal and £8,493 for a five year deal.
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“June’s figures suggest that the first part of the jigsaw is firmly in place as far as a housing market recovery is concerned. The first instalment of Help To Buy has whetted the appetite for property and sent buyers swarming to their nearest estate agent to see what’s on offer.
“Having almost 7,000 reservations under his belt will give George Osborne confidence when he steps up to play his next card and reveal the details of the mortgage guarantee scheme. It’s a crucial move that will open up the market to less affluent buyers if he gets it right and if confidence spreads to the construction sector.
”Reports that fixed mortgage rates will start to rise are turning out to be premature; in fact, I’d bet my house on further reductions over the summer.”
