The Week Unzipped: Number of mortgages granted falls as lending standards remain strict

MORTGAGE lending dipped at the end of the year to 39,900, with 4 per cent fewer house-purchase loans granted in December compared with the previous month. However, lending was slightly up in 2010 compared with the previous two years, according to figures from the Council of Mortgage Lenders.

The number of loans to housebuyers increased by 3 per cent to 529,300. This compares with 511,700 in 2009 and 513,100 in 2008. The value of lending also rose 11 per cent to 77 billion.

But last year remortgages hit a 13-year low, down 23 per cent by volume to 313,200, compared with 865,800 in 2008. In December the number of loans granted to first-time buyers was also 3 per cent lower at 14,500 and for home movers fell 4 per cent to 25,400.

The CML warned that lending criteria remained strict, with banks and building societies demanding an average deposit of 23 per cent of the value of the house.

It predicts lending will remain flat in 2011 as restrictions on funding continue and consumer demand drops.

Base rate held at 0.5%

THE Bank of England has held interest rates at 0.5 per cent for the 23nd consecutive month. The decision was widely expected despite fears of spiralling inflation.

The Monetary Policy Committee also voted to hold the quantitative easing scheme at its current level of 200 billion.

Christmas countdown

YORKSHIRE Building Society is encouraging savers to take advantage of its Christmas Saver account before it closes on 16 February.

The account pays 3.5 per cent and matures at the beginning of December - just in time for the festive period.

Customers can deposit up to 1,200 throughout the year with no minimum monthly investment required and no penalty for months when no deposit is made. Savers have invested more than 16 million since the accounts opened at the start of December 2010.

New home loan deals

HALIFAX has launched a two-year fixed rate mortgage at 3.14 per cent and a two-year tracker at 2.49 per cent. Both deals require a 40 per cent deposit and charge a 995 fee. In addition the bank has reduced selected 75 per cent loan-to-value mortgages by up to 0.45 per cent.

The updated Remortgage range includes a fee-free two-year fix at 4.24 per cent and a three-year fix at 4.34 per cent with a 495 fee.

Santander has launched a two-year fixed mortgage at 5.45 per cent, available with a 10 per cent deposit, to help first-time buyers get on the property ladder.

The deal charges a 99 fee and comes with free mortgage valuation and 250 cashback on completion.

The lender has also introduced a two-year fixed Remortgage deal at 4.99 per cent with a 15 per cent deposit. The deal charges a 995 fee but is available to current account customers with a reduced fee of 495.