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CML: Borrowers turning to trackers
10 April 2008 10:30
The popularity of tracker mortgages has increased as borrowers await further base rate reductions, according to new figures from the Council of Mortgage Lenders (CML).
A poll conducted by Abbey in February indicated that if homeowners were to remortgage tomorrow, just 12 per cent would opt for a tracker, whereas 35 per cent claimed that they would select a fixed-rate and 49 per cent were unsure.
Yet while the CML's new data showed that the proportion of borrowers choosing trackers rose to 35 per cent in February, up from 33 per cent in January and just 14 per cent a year previously, the share plumping for fixes slipped from 57 to 52 per cent.
Gross lending as a whole fell by 3.5 per cent from January to £25 billion, with the value of mortgages granted to homebuyers dipping by 30.6 per cent year-on-year to £7.5 billion, whereas remortgaging was up by 20.2 per cent on February 2007 at £11.3 billion.
CML director general Michael Coogan put rising demand for trackers down to expectation of a base rate cut, but urged the Bank of England to take steps to improve fluidity in the money markets so lenders can provide funds to meet borrower demand.
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