Secured Loan Numbers Continue To Increase
Recent months have seen a continuous and steady increase in the number of home owner loans and secured loans being approved by banks and building societies, as wholesale funding becomes more available and consumer confidence slowly returns to the housing and home owner loan markets.
According to the latest figures form the Bank of England, net lending to individuals increased by £1.1 billion in November last year and the amount of new lending on secured loans increased by £1.5 billion for the month, compared with just £1.1 billion for the month of October and £0.7 billion per month over a six month average.
Whilst secured loans are seeing an increase in numbers and loan amounts, due to increased property prices and higher loan to value ratios from lenders, borrowing on unsecured loans has continued to fall, with a reduction of £0.6 billion for the month, compared with £0.2 billion for the previous six month average figure. Borrowing on credit cards actually increased by £0.2 billion, to give an overall net figure of £0.4 billion reduction in total unsecured borrowing.
Brian Murphy of Mortgage Advice Bureau said “The mortgage market continues to strengthen. The number of mortgage products available is rising and so, just as importantly, is people’s confidence. More and more potential borrowers feel the worst of the recession is behind us. The borrowers who are driving this surge in mortgage approval figures are people with decent deposits and good credit histories.
Without a deposit and a good credit score, you’re still on a wing and a prayer. Importantly, many people who have the money for deposits but who have been sitting on their hands expecting prices to continue to fall are now worried that house prices may not drop back after all and that they need to buy soon before prices run away form them.”
