Home Loan Approvals Fall

Mon, 27 Apr 2009

New figures from the British Bankers Association have revealed a 7 per cent slump in the numbers of mortgages approved in March. Loans for house purchases fell from 28,024 in February to 26,097. The figures came as something of a surprise after three months of rising approval levels, suggesting that the housing market may be yet to bottom out. The figure is, however, above average of 23,152 for the previous six months, but is 25 per cent lower than the same month last year. At £7.3 billion, the value of loans approved was 54.8 per cent lower than it was 12 months ago.

Remortgage levels also fell from 28,237 in February to 26,831, as borrowers opted to stay on their standard variable rate mortgages . That appears to be a wise choice following the recent interest rate cuts from the Bank of England, which has seen many lenders’ SVR deals become cheaper than the new deals on offer.

The gross value of home loans also fell in March, from £9.2 billion to £8.9 billion, down by 47.2 per cent on March last year. The net value of the loans, which includes the repayments and redemptions, also fell, from £3.9 billion to £3.7 billion.
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