Home Owner Loans Still Slow
The latest figures have just been released by the British Bankers Association (BBA) which show that although the amount of net new lending on home owner loans and mortgages has increased over the course of this year, the overall number of new loans is still significantly lower than it was twelve months ago.
Although the banking sector has seen the largest increase in the share of the home owner loan market, with an annual increase of 3.5 per cent to the end of October this year, compared with just 0.8 per cent increase for the rest of the loan market, the overall amount of new loans was much lower than the figure for the same time last year.
There was £7.6 billion worth of new loans offered by banks in October this year, which was 16.1 per cent lower than twelve months ago and although net new loans increased by £1.7 billion in October, this amount seems small compared with the figure of £3.0 billion worth of new loans in October last year.
Although there has been a decline in the number of new loans for house purchase purposes, there has been a shift towards remortgage activity, as borrowers start to look for a better deal on their home owner loan.
One independent home owner loan broker commented “In recent months there has been a steady but very noticeable decline in the number of mortgage applications.”
“If it’s not concerns about their livelihoods that is holding people back, in many cases they are not even bothering to apply for a mortgage, as they feel their chances of being accepted are just too slim. This is particularly the case with people in need of higher loan to value loans.”
