Eight year low for mortgages in April
June 29, 2009
A recent report released by the British Banker’s Association has shown that the level of net mortgage lending for the month of April from UK lenders slipped to its lowest level in eight years.
However, whilst the amount that was lent by way of mortgages fell to £2.7 billion the number of mortgages that were approved and granted by UK lenders actually increased for that same month.
Some industry officials have predicted that over the course of this year net lending could turn into negative figures, with more money being repaid on debt than being borrowed.
However, on a brighter note the number of mortgages approved was the second highest in around a year. There were 27,685 mortgages approved for that month, which reflected an increase of 4 percent compared to March, although the number was 16 percent lower than a year earlier.
One official from the BBA said: ‘The house purchase part of the mortgage market appears to have stabilised, with slightly more approvals coming through, although April’s weak net mortgage lending reflects the lower number of approvals in previous months. Households’ uncertain financial circumstances not surprisingly continue to dictate consumer behaviour, both in the housing market and in generating only low demand for new personal loans.’
A leading economist added: ‘The very modest rise in mortgage approvals in April reported by the BBA adds to the overall evidence that housing market activity has very likely passed its worst point helped by the substantial fall in house prices from their 2007 peak levels and markedly reduced mortgage rates. But it is still very weak compared to long-term norms. Furthermore, the BBA data reinforce our belief that the pick-up in housing market activity will be gradual and fitful for some time to come, given ongoing very poor economic fundamentals and still tight credit conditions.’
- Interest rates being kept static for fourth month This month has seen the Bank of England announce that for the fourth month in a row the base interest rate is being kept on hold, at its all time low level of 0.5 percent.
- Speculation over mortgage support scheme rises According to a recent report there is rising speculation over a proposed government mortgage support scheme, with uncertainty over which lenders are prepared to support the scheme and when the scheme will actually go ahead.
- Bank of England under pressure to cut rates The Bank of England has found itself facing pressure to cut interest rates again, following reports that house price growth had fallen to its lowest level in twelve years. According to officials from Nationwide house
- Will mortgage approval levels recover? With the ongoing global credit crunch causing huge problems for mortgage lenders when it comes to raising finance to fund their mortgage lending operations, mortgage approval levels have been taking a hit for some time.
- Interest rates could plummet next year according to officials Over the past couple of years interest rates have soared to 5.75%, leaving many homeowners struggling to keep on top of their mortgage repayments and resulting in an increase in repossessions. Homeowners were therefore relieved
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