Mortgage lending in April was up on the previous month and a little higher than the trend rate for the last six months.

According to the British Bankers Association (BBA), the country's leading high street banks lent £17.8 billion in mortgages in April compared to a six month average of £17.2 billion.  The net increase in the amount lent (loans less repayments) was £5.4 billion, well above the average for the last six months of £4.9 billion.  The total number of loans rose from 35,500 in March to 38,700 in April.

But the growth in lending was directly attributable to high levels of re-mortgaging.  Lending for house purchase, at £5.9 billion, was below the six month trend of £6.6 billion.  The data chimes with information from the Intermediary Mortgage lenders Association (IMLA) which reported earlier that re-mortgaging continues to grow as a proportion of total mortgage lending.  IMLA estimates that almost half of all mortgages arranged were re-mortgages.  In contrast, loans for house purchase fell to 20 per cent of the total.  Interestingly, loans for first time buyers rose slightly from 10 to 11 per cent of the total.

The news suggests that existing homeowners are finding it easier to re-mortgage than many had expected.  Some commentators, the Financial Services Authority, had worried that borrowers whose fixed rate deals were coming to an end might get stuck on high cost variable rate mortgages - the so called ‘payment shock'.  But the figures suggest that most homeowners are re-mortgaging successfully.  David Dooks, statistics director at the BBA said that there is an active re-mortgaging market:  "with some £18 billion in lending and nearly 150,000 loans approved in April, it is clear that, contrary to some reports, the mainstream mortgage market has not ground to a halt".