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Residential mortgage approvals remain at historic lows in July and volume drops on BTL mortgages also
Mortgage approvals for house purchases remained near a record low in July and the British Bankers' Association said there was no sign yet of a property market recovery.
The BBA said mortgage approvals totalled 22,448 last month, 65% lower than in the same month last year. That was only fractionally higher than June's series low of 22,369 and almost 12,000 below the average of the previous six months.
Total mortgage lending amounted to £4.3 billion in July, unchanged from June but also below the previous six-month average of £4.8 billion. Meanwhile the Council of Mortgage Lenders said buy-to-let lending declined in the first half of 2008 to 144,600 new loans, down 18% from 176,500 in the second half of 2007 and from 169,500 in the first half of 2007. However, the number of buy-to-let mortgages outstanding continues to rise - there are now 1,103,000 buy-to-let mortgages in the UK worth £132.5bn. This is a rise of 19% by volume and 25% by value from a year ago.
Buy-to-let mortgages now represent 9% of the total number of UK mortgages outstanding and 11% of the value of mortgage stock.
Michael Coogan, director general of the CML, said: “The shortage of mortgage funding is creating similar problems for buy-to-let landlords as it is for other borrowers. However, we expect the rental market to remain underpinned by strong demand, partly because some people who would like to buy a home are being forced to carry on renting for now.”
House prices have shed around 10% since last August after a decade in which property values almost trebled.
With unemployment also rising and a recession looming, banks have tightened their lending criteria. Many now refuse to offer mortgages to homebuyers with less than a 25% deposit.
"The monthly numbers of approvals for house purchase, which have fallen by some two-thirds over the last year, levelled off in July. It would, however, be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low," said BBA statistics director David Dooks.
A report from ratings agency Standard & Poor's showed the number of Britons failing to meet mortgage repayments rose significantly in the second quarter.
"With no sign of credit conditions easing and house prices continuing to fall, we expect delinquencies to continue rising and losses to increase over the coming quarters," said S&P credit analyst Kate Livesey.
The BBA said mortgage approvals totalled 22,448 last month, 65% lower than in the same month last year. That was only fractionally higher than June's series low of 22,369 and almost 12,000 below the average of the previous six months.
Total mortgage lending amounted to £4.3 billion in July, unchanged from June but also below the previous six-month average of £4.8 billion. Meanwhile the Council of Mortgage Lenders said buy-to-let lending declined in the first half of 2008 to 144,600 new loans, down 18% from 176,500 in the second half of 2007 and from 169,500 in the first half of 2007. However, the number of buy-to-let mortgages outstanding continues to rise - there are now 1,103,000 buy-to-let mortgages in the UK worth £132.5bn. This is a rise of 19% by volume and 25% by value from a year ago.
Buy-to-let mortgages now represent 9% of the total number of UK mortgages outstanding and 11% of the value of mortgage stock.
Michael Coogan, director general of the CML, said: “The shortage of mortgage funding is creating similar problems for buy-to-let landlords as it is for other borrowers. However, we expect the rental market to remain underpinned by strong demand, partly because some people who would like to buy a home are being forced to carry on renting for now.”
House prices have shed around 10% since last August after a decade in which property values almost trebled.
With unemployment also rising and a recession looming, banks have tightened their lending criteria. Many now refuse to offer mortgages to homebuyers with less than a 25% deposit.
"The monthly numbers of approvals for house purchase, which have fallen by some two-thirds over the last year, levelled off in July. It would, however, be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low," said BBA statistics director David Dooks.
A report from ratings agency Standard & Poor's showed the number of Britons failing to meet mortgage repayments rose significantly in the second quarter.
"With no sign of credit conditions easing and house prices continuing to fall, we expect delinquencies to continue rising and losses to increase over the coming quarters," said S&P credit analyst Kate Livesey.
Tue, 26th Aug 2008