Mortgage approvals fall to nine-month low
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Mortgage approvals in February dropped to the lowest level since May 2009, figures from the Bank of England reveal.
The number of loan approvals for house purchase went from 48,099 in January to 47,094 last month.
February’s total approvals were also below the average for the previous six months of 55,130.
But remortgage approvals rose in February to 27,297 from 24,458 in January and were also up against the previous six-month average of 25,985.
Total net lending to individuals rose by £1.2bn in February while net lending secured on dwellings rose by £1.6bn, above the January rise of £1.5bn.
Andrew Montlake, director at Coreco, says it’s encouraging to see a rise in remortgages but says that ahead of the election purchases are likely to remain subdued.
He says: “The number of loans approved for house purchase in February is lower than expected, but given the growing sense of foreboding surrounding the big, post-election tax rises around the corner it is understandable that borrowers are putting the big decisions in their lives on hold.
“With the general election looming these figures suggest that property purchases will continue to tail off until a new government is firmly in place and borrowers know who, and what, they are dealing with.”
He adds: “While we may see a slight uplift due to Stamp Duty changes for first-time buyers and buyers of property above £1m wanting to move before the year is out, this is unlikely to occur until after the next Budget.”
Readers' comments (6)
Anonymous | 29 Mar 2010 11:02 am
I don't think it is the general public putting off buying houses that has led to a reduction in approvals, but the crazy underwriting that the lenders are still basing their decisions on.
Until the lenders start acting sensibly and actually wanting to lend money, things will not improve.
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Anonymous | 29 Mar 2010 11:03 am
How can mortgage levels drop when all we mortgage brokers hear of is 'good news', where we not told that there is more and more products available year on year (oh they were figures from last year to this and not from before!!!) and also that lenders are putting more funding and increasing ltv's!!! The real issue is that lenders do not want to lend and are cherry picking even the non derog deals and if you have even the slightest hint of a default or ccj over £500 in the last two years then bye bye even on a lower LTV. So until the market is opened up for the other 80% of the population, you know the ones where they are happy to lend and charge extortinate rates and charges when all is going well, then the market will always shrink.
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William Kingsley | 29 Mar 2010 12:04 pm
I agree with all of the above comments but for me in West Yorks the biggest factor involved in a poor Feb was the weather. If people cannot get out to view a house they want to buy then they don't need a mortgage either - surprise surprise, March has been my best month's business for a long time due to the pent up demand from the bad weather.
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Anonymous | 29 Mar 2010 12:52 pm
Until the market is opened up to accomodate people who want to borrow then of course approvals will remain low. If the vast majority of the population is unable to get a mortgage then we will never see an increase in approvals. Worse still if people are effectively trapped in their current mortgage deals then they will not be able to move up meaning there will be no access to the houses which would usually be for FTB's. No FTB's means no secon time buyers etc. Come on lenders help us out
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Anonymous | 29 Mar 2010 2:00 pm
I agree again with all comments, but in my eyes many many borrowers are happy to coast on the SVR and until such times as we see an increase in the BBR the population will simply coast thinking they can have a cheaper deal later that's when I feel we will have a true recession, People who want to make a purchase have 2 issues to contend with over tightened MLR's combining restricted lending making it a complete nightmare to get a mortgage case through with Non Advised services online and banks being left to run free with no regulation on marketing it makes you feel that the day of the adviser giving good solid advice is ending people want cheap cheap cheap and are not concerned with advice until they decide to contact a claims lawyer for another "Blame Claim" The financial services has created a massive mess brought on by our own culture of greed in Britain you can have as many regulations as you want but you cannot vet a an individual for honesty and integrity, and guess what if I was going to vet people I would start at the Banks!!!
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bobby | 29 Mar 2010 2:44 pm
Its time to face facts. As a mortgage broker the game is up. The lenders do not want us and dual price us out of the market and offer disgraceful admin centres and decline most cases anyway. The FSA want the total wipe out of the intermediary market. On the rare occassion you do manage to get a deal it take 6 weeks to get an underwriter to look at it, Abbey or 3 months to get an offer letter ( if your lucky ), Woolwich.
Lenders do not want to lend and all cherry pick A1 squealy clean 75% and under cases. Thats the only business they want.
If your self employed forget it, if you have even a minute amount of adverse credit, forget it, if you do not have a 25% deposit or equity, forget it.
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