Remortgages Reaching Unsustainable Levels

12.00.00am BST (GMT +0100) Fri 18th Jul 2003

The trend towards remortaging property while house prices remain at historically high levels is placing the economy in danger, Vince Cable MP, Liberal Democrat Shadow DTI Secretary, warned today.

His statement comes in response to figures released today by the Council of Mortgage Lenders showing that mortgage lending remained strong in June, with remortgages this year accounting for 49% of advances.

Vince Cable MP, said: "Low interest rates and high prices are pushing remortgage lending to unsustainable levels."

"With an astonishing £60 billion of new loans going to those re-mortgaging property, the consequences when the market does turn, will be severe for both heavily mortgaged homeowners and the economy."

"The huge land banks being sat on by developers and drip-fed into the market, needs to be thoroughly examined."

"More needs to be done to bring some of the surplus land into production in order to ease demand. This could particularly help first time buyers, whose ability to climb onto the property ladder is obstructed by record deposit requirements".

ENDS

The Council of Mortgage Lenders figures are available at

http://www.cml.org.uk/servlet/dycon/zt-cml/cml/live/en/cml/press_releases_2003_0718