by Mark Johnston
Mortgage Approvals on the Rise Again!
The housing market is a huge driver of the economy, and with out people buying houses, the economy fails to grow.
Toward the end of 2008 the impact of the credit freeze and the subsequent near-collapse of the banking system caused lending to shrink dramatically.
This said mortgage activity has strengthened during 2013 with the help of Government schemes. Scheme’s such as Funding for Lending and Help to Buy have prompted stronger competition, making mortgage deals easier to access.
Recent data has revealed that the number of mortgages on offer surges to a five year high with more than 10,000 deals now available.
Research by broker the Mortgage Advice Bureau This represented a “staggering” 198 per cent increase in consumers’ choice since the bottom of the housing slump in July 2009.
The British Bankers’ Association (BBA) reportedMortgage approvals to home buyers are 31 per cent higher than in the same period last year and remortgaging approvals are 40 per cent higher.
Lenders advanced almost £17 billion mortgages in the July, up from £15 billion in June and £13 billion in July 2012, according to lenders’ trade body the Council of Mortgage Lenders (CML).
Latest data showed that home buyers were borrowing more, with July’s figures showing an average £159,000 borrowed for house purchase, up 6 per cent from January.
The number of mortgages approved by banks is running at a third higher than a year ago as the housing market revival gathers pace.
Also high loan to value (LTV) lending has narrowly missed hitting a post financial crisis record. It was 56 per cent higher than last July, with 6,946 loans advanced to borrowers with a deposit of less than 15 per cent, compared to just 4,446 loans in July 2012.
The increased number of approvals indicates resurgence in consumer confidence.
However, overall mortgage lending remains “subdued” because home owners are making high repayments on their loans
Jonathan Harris, director of mortgage broker Anderson Harris, said that despite the uplift in activity, house sales are still “far lower than they were at the height of the boom years”.
Mark Harris of upmarket mortgage broker SPF Private Clients, also adds “While the lending numbers are the strongest they have been since 2008, this will be a long, slow recovery. Lending levels are still running at a fraction of what they were at the height of the housing boom.”
The fact is the funding for lending scheme has helped brighten the long term picture for borrowers, but it is still fighting against a tide of problems like high inflation and weak wage growth.
In conclusion, credit availability is easing and there is no shortage of choice or funding in the market. With many lenders keen to increase their business, the stream of product launches and special offers shows no sign of drying up.
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