Mortgage News Mortgage Approvals Climbed 74percent In July 18469805

Mortgage approvals climbed 7.4% in July

25 August 2009 / by Rachael Stiles

Mortgage approvals for house purchase in July saw a 7.4 per cent rise compared to the previous month, the latest figures from the British Bankers’ Association show, suggesting the freeze in mortgage lending could be thawing.

While July’s gross mortgage lending remained below seasonal expectations, high street lenders approved 38,181 home loans, totalling £8.4billion, compared to £8.1billion in June.

Meanwhile, net lending was constrained by repayments, resulting in the lowest net mortgage lending since October 2000, at £1.6billion.

The surge in repayments is partly due to homeowners on tracker mortgages cashing in on falling interest rates, which have seen hundreds of pounds wiped off some people’s monthly repayments, offering the opportunity to overpay and reduce the size and cost of their mortgage.

Commenting on the latest data, BBA statistics director, David Dooks, said: “The numbers of mortgages approved for house purchase each month by the high street banks have continued to recover from last November’s low point, but new lending is largely being offset by repayments, so that net rises remain relatively weak.”

The BBA’s figures are correlative with the Council of Mortgage Lenders’ report on July’s market activity, released last week, which found that gross mortgage lending across the market increased 26 per cent on June’s figures.

The CML called these results “further evidence of a modest improvement in the market over the summer” following an “exceptionally weak” period of lending during the winter.

But, the report emphasised that these levels remain historically low, and that the summer months often see a season rise, so the positive outlook which could be gleaned from these results should not be exaggerated.

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Written by Editorial Team