Mortgage News 187percent Increase In Mortgages 18470690
187% increase in mortgages
12 April 2010 / by Rachel Mason
Principality Building Society has reported a 187% increase in the number of borrowers taking out mortgages.
The building society says that February this year marked the largest number of mortgage applications since November 2007 – before the onset of the credit crunch – suggesting that the mortgage market is beginning to recover.
“These figures are a good sign of the gently recovering confidence in the housing market,” says Pricipality’s Graeme Yorston. “The average mortgage rate has been steadily decreasing since the middle of last year and this, coupled with more affordable house prices has encouraged a healthy mix of buyers.”
Principality’s research also reveals that 21% of the mortgages applications received in the past three months have been from first time buyers, which it says is positive for the mortgage market as a whole.
“Any sustainable recovery in the market is dependent on movement from both first and next time buyers,” explained Graeme.
Principality says it supports any measures designed to help first time buyers get a foot on the ladder, for example, doubling the threshold for being exempt from stamp duty from £125,000 to £250,000.
“The introduction of a series of measures to help first time buyers get the key to their own home is critical to the future of the market and at Principality we are focusing on developing innovative products that will help to support them in achieving this goal,” said Graeme.
However, not everyone is convinced that too much should be read into these latest figures. Ray Boulger from mortgage adviser John Charcol says that “One month doth not make a trend” highlighting the fact that Janaury’s figures showed improvement, but March showed weak mortgage lending and approval again. While moneysupermarket.com says that regardless of the figures, more still needs to be done for first time buyers for any major change to be seen.
“Whilst the majority of our users say the stamp duty cut is a good thing, and recognize that people need help to buy their first home, the reality is that until LTVs and corresponding loan rates improve, the situation remains largely the same,” said Hannah-Mercedes Skenfield, mortgage channel manager at moneysupermarket.com.
“Without a large deposit, you’ll find yourself on a higher rate and that’s if you can get a mortgage at all. It will be interesting to see over the long-term what impact this has.”
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