What the heck are REMORTGAGES??

The number of mortgages approved for house purchase increased for the third month in a row during February, figures have shown.

A total of 28,179 loans for people buying a home were approved during the month, up from 24,278 in January and a low of 17,878 reached in November, the British Bankers' Association said.

But the figure was still 31% lower than it had been in February last year, and the group cautioned that the rise reflected the greater market share of the high street banks, rather than an increase in demand from consumers.

There was also a rise in net lending, which strips out redemptions and repayments, with this increasing to £3.9 billion during the month, up from £3.4 billion in January, although it remained well down on the £5.1 billion recorded 12 months ago.

But the total value of all mortgages advanced, including people remortgaging, fell slightly to £9.2 billion - its lowest level since June 2001.

There was also a slight fall in the number of loans approved for people remortgaging, with 28,746 mortgages arranged for people switching to a better deal, 5% fewer than during the previous month and 59% down on a year earlier.

Remortgage volumes are being hit by record low interest rates as many homeowners find it is cheaper to stay on their lender's standard variable rate when their current deal comes to an end, rather than take out a new mortgage.

David Dooks, director of statistics at the BBA, said: "Most new mortgage lending is being done by the high street banks but demand is, of course, being moderated by the impacts of the recession.

"Remortgaging activity has slowed in recent months, while higher numbers of loans approved for house purchase simply reflect banks' greater market share."

Estate agents have been reporting a rise in Inquiries from potential buyers, who are being attracted back to the market by low interest rates and the house price falls seen so far.

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