A recent report from the British Banker’s Association has shown that mortgage lending levels for the month of February remained subdued. In its report the BBA stated that the UK’s big banks approved 35,275 mortgages for the month of February, which was not much higher than 35,154 seen in January.
According to the BBA the market was still being affected by the rush of buyers that tried to get property purchases completed before the end of last year due to the stamp duty holiday coming to an end.
An official from the BBA said: “House purchase approvals were some 16% higher than in February last year but still well below the figure in December as the aftermath of the year-end change to stamp duty was still working through. The average value of house purchase approvals (£140,800) was 11.5% higher than a year ago. Volumes of remortgaging and equity withdrawal approvals continued to be lower than a year earlier.”
The levels of mortgage lending had been increasing but over the past couple of months this trend has been hindered because of the end of the stamp duty holiday at the end of last year. Officials believe that the restrictions on mortgages have also had an effect on mortgage lending levels, and this could be made worse by plans by the Financial Services Authority to ensure that mortgage lenders carry out more stringent checks before approving any mortgage loans to make sure that borrowers can afford to repay their loans.
The FSA action to make lenders carry out more stringent checks has divided the industry according to recent reports, with some lenders agreeing with the proposals of the FSA and others stating that they could make it very difficult for groups such as the self employed to get mortgages.