You are here: Home - Mortgages - First Time Buyer - News -

Mortgage approvals fall to nine month low – Bank of England

Mortgage approvals for house purchases fell for the third consecutive month in April to the their lowest level since July last year, Bank of England lending figures have revealed.

After climbing to a peak of 75,838 in January, approvals have been gradually dropping back to 66,563 in March and 62,918 in April according to seasonally adjusted data.

The gradual decline in approvals is supporting the expectation that the new affordability rules will have a cooling effect on transactional activity.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Today’s figures from the Bank of England should help to address some of the short-term memory loss that seems to be prompting calls for additional action to cool the mortgage market.”

Remortgage activity followed the same path with a drop off in approvals for the third month in a row.

The number of remortgage approvals in April fell by 3 per cent month-on-month to 31,260, the lowest figure since March last year.

“The fact that purchase, remortgage and other mortgage approvals all slowed during April is reason enough to pause and assess the full impact of these changes before adding further constraints to the market,” added Murphy.

Rob Wood chief UK economist for Berenberg Bank said gross mortgage lending rose rapidly in April despite fewer mortgage approvals with £18.4bn of gross lending up from £17bn in March.

He said: “It seems the mortgages that are being approved are for higher value properties, reflecting sharply rising house prices.”

Reports of house price inflation running as high as 10 per cent in the last 12 months and the price of an average London home now costing more than £500,000 sparked calls for high level intervention.

Deputy Prime Minister Nick Clegg said if Mark Carney recommended paring back the Help to Buy schemes in a bid to control the housing market the government would consider the advice.

But Murphy said it may be too soon to consider taking action in light of today’s figures.

“The changes are no reason to panic as thousands of people are still finding that mortgage finance is available.

“But it will still take a number of months to see where things stand and there is a real danger of acting too soon and shooting the recovery in the foot.”

He added: “Any action in the mortgage market will do nothing to cool the cash purchase market which is a major factor in rising house prices.”






Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Consumers shun cash in favour of cards

The number of cash transactions is lower than ever as consumers embrace new ways to pay for everyday items on...