Finance Matters

Posts Tagged ‘approvals’

The Bank of England has today revealed mortgage approvals fell in September for the first time in six months.

According to the Bank, there were 50,967 loans approved in the month – down 3% on August’s figure.

However, September’s figure was broadly in line with forecasts and suggests the UK mortgage market will remain subdued for some time to come.

Approvals still remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

In other news today, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in September in the UK.

According to HMRC, 72,000 homes worth at least £40,000 or more were sold in the month – the second consecutive monthly decline and way below the July peak of 83,000.

At the height of the housing boom in July 2007, 151,000 homes were sold.

Commenting on the figures, Howard Archer of IHS Global Insight, said: “September’s retreat in mortgage approvals reinforces belief that there is little evidence of any significant step in housing market activity.”

Mr Archer also believes that house prices are likely to fall in the coming months as a result of rising unemployment and increasing uncertainty surrounding the economy.

The Bank of England has today revealed mortgage approvals picked up significantly in August to a 20-month high.

According to the Bank, there were 52,410 loans approved in the month – almost 3,000 more than the level seen in July and the highest figure since December 2009.

The figure was also higher than the 49,500 expected by analysts.

However, approvals still remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

In other news today, the latest house price index from the Nationwide Building Society has revealed prices rose by just 0.1% in September on a monthly basis.

On an annual basis, house prices are now 0.3% lower than this time last year with the average UK home costing £166,256.

Meanwhile, when comparing prices in the three months to the end of September with the previous quarter (which is a more reliable indicator), prices were unchanged.

The latest figures suggest the housing market will remain subdued as a lack of buyers, together with the ongoing lack of mortgage availability, means demand for housing is weak.

The Nationwide’s chief economist, Robert Gardner, comments: “Sentiment towards major purchases is depressed, as a result of weak labour market conditions and ongoing pressure on household budgets from above-target inflation.”

Mr Gardner expects prices to remain relatively stable throughout the remainder of the year but cautioned that the outlook had “darkened” due to the euro zone sovereign debt crisis which is denting confidence and driving up banks’ funding costs.

Also this week, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 78,000 homes worth at least £40,000 or more were sold in the month – 6,000 less than the previous month and 3,000 lower than in August 2010.

However, August is traditionally regarded as a quieter month due to the holiday season.

At the height of the housing boom in July 2007, 151,000 homes were sold.

The Council of Mortgage Lenders (CML) has reported the number of loans for house purchase rose in July.

According to the Council, there were 48,400 loans advanced for house purchase in the month – up by 1,000 from June’s figure but almost 7,000 lower when compared with July 2010.

Commenting on today’s figures, Paul Smee, director-general of the CML, said: “August saw global financial turmoil and unrest closer to home and recent Bank of England approvals figures do not necessarily suggest a continuing upturn in lending in coming months.”

Meanwhile, of the 48,400 loans, 18,200 were provided to first-time buyers – a fall of 1,300 lower when compared to the same month a year ago.

First-time buyers have to put down an average deposit of 20% in order to secure a mortgage, according to the Council.

With house prices edging higher for the year to date, the average new mortgage has gone back up to £120,000, the CML said, meaning affordability remains a major issue for first-time buyers.

Meanwhile, remortgaging also edged higher in July, with 31,500 loans worth £4 billion – up 1% on June’s figure.

Remortgaging has remained subdued during the historically low interest rate environment but soaring inflation over the last few months has led to speculation that interest rates will be lifted.

The British Bankers’ Association (BBA) recently announced house purchase approvals came in at 33,417 for July, activity having gathered pace since June (32,123) and exceeded the previous six-month average (30,695).

However, while the CML said the UK mortgage market is holding steady, many still believe that activity and mortgage lending is expected to remain subdued throughout the remainder of the year as a result of uncertainty surrounding the economy and rising unemployment.

In other news today, the Royal Institution of Chartered Surveyors (Rics) said just 14 homes were sold per estate agent in the three months to August – the lowest level for over two years.

Furthermore, more surveyors reported price falls than price rises in August, the Rics said.

The Bank of England has today revealed mortgage approvals picked up significantly in July to a 14-month high. According to the central Bank, there were 49,239 loans approved in the month – higher than the upwardly revised 48,500 for June and a significant improvement on April’s 45,855 which represented a four-month low. The figure was [...]

The Bank of England has today revealed mortgage approvals picked up significantly in July to a 14-month high. According to the central Bank, there were 49,239 loans approved in the month – higher than the upwardly revised 48,500 for June and a significant improvement on April’s 45,855 which represented a four-month low. The figure was [...]