July Sees Increase in Home Loan Approvals

Tue, 15 Sep 2009

The Council of Mortgage Lenders (CML) has revealed an increase in the number of loans approved to homeowners in July. The growth is the first rise in approvals in two years, as Britain’s property market finally shows signs of recovery. The number of loans approved by lenders rose by 24 per cent on the previous month, to 56,000 – a 19 per cent year on year increase. The CML labelled the yearly rise the first ‘material’ growth since February 2007, as the loan and property markets begin to show signs of recovery. The number of loans had increased year on year in May 2007, but with an increase of just 0.2 per cent, the CML declared it immaterial.

Total gross lending also rose to £14.5 billion, the second consecutive increase, as the CML revealed their temptation to declare a recovery in the mortgage market. However, chief economist at the group, Paul Samter, warned that such optimism could be dampened by barriers that remain to lending. Mr Samter suggested that lenders remain unable to fund increased lending, given the write offs that have been made on toxic debts in the past year, while homeowners appear reticent to remortgage .
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