Home Loan Approvals Drop Once Again

Mon, 18 Aug 2008

New figures from the Council of Mortgage Lenders have revealed yet another monthly decrease in the number of home loans granted to first time buyers . The number of loans secured by first time buyers decreased by 8 per cent in June to 18,100, representing a 46 per cent decrease on the previous year. The head of research at the CML, Bob Pannell, was unsurprised by the latest figures, commenting that ‘mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand’.

There was also an 8 per cent monthly fall in lending to home movers, which fell to 29,100 – down by 54 per cent on the previous year, suggesting that although first time buyers have found it increasingly difficult to secure a loan in the past year, it has become even harder for homeowners . There was also a decrease in the number of remortgage deals in June, which fell to 75,000, representing a fall of 21,000 on the previous year.

Part of the reason that borrowers are finding it increasingly difficult to secure loans is the demand for higher deposits by lenders, with the average deposit up by 2 per cent last month to 22 per cent. Meanwhile, the average fixed rate mortgage deal rose by 0.04 per cent to 5.86 per cent last month.
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