Mortgage approval levels remain on a low
Officials from the British Bankers Association have revealed that mortgage approval levels in the UK are still low, with February’s approval figures reflecting a drop of around one third compared to February of last year, although the figure was slightly higher than January of this year. Experts state that the low level of mortgage approvals for home movers came from a range of factors. In February £43,870 was lent to home movers.
According to officials around half of the mortgages that were approved for the month were for homeowners that were refinancing to a cheaper deal rather than those that were actually purchasing another property and moving home. There has been a drop in mortgage approval levels due to the increasing stringency that lenders have put in place, making mortgages accessible to fewer people.
Lenders are also having problems securing the finance that they need to fund their mortgage lending, and this means that they have to be more careful about how much new business they take on. In addition to this fewer people may be applying for a mortgage because of the risk of house prices falling after they have purchased a property, as well as because of lack of affordability and finance.
An official from the BBA said: “In an environment of tightening lending criteria, re-mortgaging, either to fix, re-fix, or reduce borrowing costs, has been a clear influence on mortgage data in the first two months of this year, resulting in mainstream lenders picking up market share.”
He also went on to say: “Despite the relative pick-up in February’s reported retail sales, consumer credit and cards in particular, continued to be subdued.”
Recent additions:
- Interest rate cut becomes more likely due to tighter lending conditions
- Huge drop in range of mortgage deals available
- Disaster could lie ahead for those on interest only mortgages
- Charity concerns over sale and rent back firms
- A five year fix could work out cheaper than a two year one
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