Loans for house purchases rise to 2007 levels
[ Posted October 23rd, 2009 ]According to the Bank of England’s latest Trends in Lending report, published earlier this week , revealed that the UK’s banks and building societies, which means a net balance of lenders, expect mortgage availability to rise “somewhat” during the final quarter of the year.
In related news, the Bank of England’s Trends in Lending survey, published earlier this week, expect the availability of mortgages to improve in the months ahead.
New mortgage approvals by High Street banks have now risen for the eighth consecutive month and the BBA claims that loans for house purchases have returned to a level last seen at the end of 2007.
Meanwhile, new mortgages cost more in August, with a typical rate at 4.3%, compared with 4.2% in July.
Commenting on the report, the Council of Mortgage Lenders (CML) says it confirms a continuation of the “two-speed” mortgage market, with lending for house purchases continuing to increase and remortgaging remaining weak.
Figures from the British Bankers’ Association (BBA) show 42,100 home loans sanctioned for house purchases, up from 40,100 in August and a 77% improvement on a year ago.
Other mortgage approvals “remained subdued” last month and the Association concludes that “households are generally cautious continuing to reduce their borrowing and build up deposits”.
However, the body’s statistics director, David Dooks, cautions that future housing market activity is dependent on more properties coming on to the market. Despite a dip in mortgage lending during the third quarter of 2009, banks and building societies expect the availability of mortgages to improve in the months ahead.
Lenders said they were more optimistic about the economy and housing market . In addition, falling default rates could contribute to a keener lending environment, although the bank says defaults are still expected to rise further.
Optimism among lenders apparently reflects their perceptions of a better outlook for both the UK economy and house prices.
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