Approvals Slide for UK Mortgages and Remortgages
According to the British Bankers’ Association, mortgage approvals fell from the March figure of more than 31,000 to a little over 29,000 in April - a 6% slide. Compared with the same time last year, a more significant 18% decrease has taken place.
Remortgage approvals also fell month on month to April by more than 10%. Year on year comparison also indicated a fall of 7%.
Even though both mortgage and remortgage approvals displayed degradation in numbers both month on month and year on year, the BBA refers to the mortgage lending market as “stable”. Monthly repayments are also maintaining a strong track record, as most are not falling into arrears.
David Dooks, BBA stats director, commented on the status of banks, saying: "Individuals and businesses continue to save more, pay off debt and borrow less as uncertainty about the economy has entrenched a 'wait and see' attitude. However, banks are still able to meet the need for home loans, even though demand remains weak."
The chief economist at IHS Global Insight, Howard Archer, discussed how mortgage approvals were occurring at about half the rate seen in 1997, when figures totaled around 58,000.
He said: "The relapse in mortgage approvals in April from an already low level reinforces our belief that modest falls in house prices are more probable than not over the coming months, as tighter fiscal policy and the possibility of gradually rising interest rates before the end of 2011 maintains pressure on the housing market,"