Thousands of mortgages a month being turned down by banks
Recently released figures have shown that every month thousand of mortgage applications in the UK are being turned down by lenders.
The figures were released by the Bank of England, and showed that in all around sixteen thousand mortgage applications are being turned down by lenders each month, as the ongoing recession and the global credit crunch continue to take their toll and affect lending levels.
Around twelve thousand mortgage applicants a month were being turned down in December of last year by UK mortgage lenders, but since March this has increased to around sixteen thousand since March of this year, with lenders becoming increasingly stringent as the recession wreaks havoc in the jobs market and the economy.
The Bank of England has not released figures such as these before, and the date has shown just how particular lenders are becoming when it comes to who they will accept for credit.
One mortgage broker expert stated: ‘It’s much harder for homeowners to be accepted. We’ve seen a complete reversal in the way that mortgage lenders do business. Where before they were looking at reasons why they should grant you a loan, today they are looking at reasons why they shouldn’t.’
Another industry official stated: ‘While recent signs from the housing market have been more encouraging, we do not anticipate a significant recovery in activity in the coming months. Lending volumes appear to have stabilised at extremely low levels, but the weak labour market and lenders’ limited access to funding will constrain activity for some time yet.’
The Council of Mortgage Lenders stated: ‘Underneath the headline gross lending figure, it’s likely that a moderate improvement in house purchase lending in May has been offset by very low remortgaging volumes as borrowers stay with existing deals. While recent signs from the housing market have been more encouraging, we do not anticipate a significant recovery in activity in the coming months. Lending volumes appear to have stabilised at extremely low levels, but the weak labour market and lenders’ limited access to funding will constrain activity for some time yet.’
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