Mortgage Approvals Down Despite Another Record Low Rate
The number of mortgage approvals in the UK fell to their lowest level in 8 months in February, cooling optimism that the large mortgage market had finally begun to turn a corner. Research from e.surv chartered surveyors revealed that mortgage approvals in February 2013 were at their lowest level since July 2012 while house purchase lending fell by 11 per cent from January.
This drop in lending is despite falling mortgage
rates, and another record-breaking fixed rate has been launched for high net
worth mortgage customers.
Mortgage approvals fall to lowest level since
July 2012
The latest mortgage monitor report from e.surv
shows that mortgage approvals for house purchase lending fell from 54,719 in
January to 49,019 in February 2013. The nationwide surveying firm suggests the
downturn is due to weakening borrower demand rather than a decline in the
availability of mortgages.
E.surv business development director Richard
Sexton says: “House purchase lending has fallen despite a wider and cheaper
range of mortgages on offer from lenders. The root cause is difficult to
discern: the bad weather at the beginning of the year and a fall in demand for
mortgages, rather than a tighter supply of the, may both be factors.
“More would-be buyers are focusing on
consolidating and paying off debts, and are reluctant to purchase a new home
while their finances are being pillaged by high inflation and record-low savings
rates,” he added.
While the overall number of mortgage approvals
fell, loans at higher loan to values increased and now account for one in eight
loans, according to e.surv. Mortgage Strategy reports that lending to
borrowers with a deposit of 15 per cent or more increased to 12.3 per cent while
the average loan to value rose to 61.3 per cent.
“These figures show that he UK large mortgage
market is not out of the woods,” said Islay Robinson, CEO of London mortgage
broker Enness Private Clients. “While mortgage rates may be falling, the UK
economy continues to struggle and many people simply don’t have the confidence
to commit to a major purchase such as a new home.”
Over recent months, falling mortgage rates have
been credited with the increase in demand for home loans. And, mortgage rate
records continue to be broken as we see next.
Another record 2 year fixed rate
launched
The large mortgage market has seen several
record-breaking deals over the last few weeks and now the Chelsea Building
Society has launched another market leading two-year fixed rate for high value
mortgage clients. The deal is at 1.74 per cent, is available to 60 per cent loan
to value and has a £1,695 fee. The mutual also offers an offset option at 1.94
per cent.
Chelsea Building Society product manager Sunjeev
Sahota says: “We’re committed to providing the most competitive mortgages and
are pleased to be able to offer another market-leading short term fixed
rate.
“The Chelsea has made a strong start to mortgage
lending in 2013 and now we’ve reduced what was already an excellent best buy
product by a further 0.15 per cent, which will appeal to home buyers with a
larger deposit or homeowners wanting to remortgage.
“Offset mortgages are particularly popular among
Chelsea borrowers so we’re glad to be able to offer the additional choice of an
offset version of such a competitive mortgage.”
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