Mortgage approvals down 7% in March

28 April 2009 / by Rebecca Sargent
The number of mortgages approved for house purchase fell by 6.8 per cent in March compared with the previous month, latest statistics from the British Bankers Association have revealed.

The figures taken from the UK's leading banks, show that in March 26,097 mortgages for house purchase were approved, compared to 28,024 in February.

Meanwhile, the amount loaned through mortgages also fell from £9.2billion in February to £8.9billion in March.

The mortgage figures, according to the BBA, show how talk of 'green shoots of recovery' is premature and unrealistic. Commenting, BBA statistics director David Dooks said:

"The banks' figures show it would be unrealistic to expect the mortgage market to recover in a steady and consistent way in the current economic environment."

Nevertheless, economists at the Royal Chartered Institution of Chartered Surveyors (RICS) are reluctant to believe that the recent pick up in housing market activity has come to a halt.

Commenting, Simon Rubinsohn, RICS chief economist, said: "Crucially, the RICS 'new buyer enquiries' series rose further last month and our suspicion is that this will translate into higher transaction levels over the coming months notwithstanding the drop in mortgage approvals in March."

The recent Budget announcements of the extension of an increased stamp duty threshold and the implementation of the credit guarantee scheme, will, according to Mr Rubinsohn, also help the market to pick up and "provide some much needed support for the lower end of the housing market," he said.

Meanwhile, according to reports today, Nationwide Building Society has almost doubled its standard variable mortgage rate for new customers. Reports suggest that those who take out a Nationwide mortgage after April 30 will move onto a standard rate of 3.99 per cent when their deal ends – 1.99 per cent higher than the two per cent currently enjoyed by existing customers.

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