The housing market will remain "muted" for several years, the Council of Mortgage Lenders gloomily predicted today, as new figures showed remortgaging fell to its lowest level in more than a decade during August.
A dearth of home loan deals from banks made it difficult for borrowers to remortgage, the CML said, adding that shaky consumer confidence, particularly ahead of next week's Comprehensive Spending Review, was also holding borrowers back.
Around 25,000 remortgage loans, worth £3 billion, were advanced during the month, down 13% on July.
Overall, 51,600 mortgages, worth £7.7 billion, were organised in August, 8% lower than the previous month.
Brian Murphy, of broker Mortgage Advice Bureau, said: "In a normal market, you'd expect to find remortgaging levels nearer 40% to 50%, but there are currently no financial incentives for borrowers to switch.
"We expect the mortgage market to remain very subdued in the next few months."
Michael Coogan, director general at CML, added the spending cuts would "further dampen consumers' appetite to borrow".
He said: "We would expect lending to slow more significantly, year on year, as we head towards the end of the year. We expect a muted market in the next few years."
