Number Of New Loan Approvals Continues To Rise
As consumers in the UK are slowly starting to become more confident in the future of the economy and banks and building societies are equally slowly starting to relax their lending criteria on home owner loans and mortgages, albeit slightly, there has been more good news on the number and amount of new loans which are currently being offered to borrowers.
According to the latest figures from the Bank of England, the total amount offered in loans in September increased by an extra £900 million, with a total number of loans approved for house purchase reaching 56,215 for the month.
The total number of loan approvals has increased since August, although the amount borrowed has actually fallen slightly, but both loan numbers and amounts are well above the average figure for the previous six months of £600 million in loan amounts and 52,970 in home owner loan approvals.
Although the number of loans for house purchase is continuing to increase on a month by month basis, the trend of declining remortgage activity is still continuing, with figures still dropping as borrowers keep their previous home owner loan with their existing lender, in many cases due to high existing loan to values and low interest rates from their existing lenders standard variable rate.
Paul Samter of the Council of Mortgage Lenders (CML) said “There is clear evidence of a significant pick up in housing market lending activity from a year ago, even though it remains low on any historic comparison. On the other side of the gross lending equation, remortgaging volumes continue to weaken. Borrowers seem to be opting to stay on low reversion rates, with official interest rates not expected to rise for some time yet.”
