Mortgage market bounces back in April

We are pleased to see the mortgage market bouncing back to life after a subdued start to the year which is great news for borrowers.

In February mortgage lenders dished out £13bn worth of mortgages, which sounds like a lot, but it was down 9% on the previous February according to Council of Mortgage Lenders figures.

That means that there are fewer people buying homes and it is hard to put your finger on why. Could it be tough new mortgage rules that make it harder for borrowers to get a deal in order to make the system safer?

Perhaps it was rocketing house prices pushing property out of reach for many first-time buyers unable to raise the giant deposits needed? Maybe homeowners have a sense there is a bubble and are sitting tight.

Whatever the reason was earlier this year and towards the end of 2014 the mood appears to have taken a decisive shift in April.

The number of loans approved by lenders has grown year-on-year for the first time in nine months as borrowers rush back to market.

Bank of England data shows 114,628 loans approved in April, a 8.7% increase on the 105,394 approved a year earlier.

It was the first annual increase in loans since July 2014 showing a long stagnation could now be over.

There is a big caveat as the value of loans lent actually fell 6% from £18.2bn to £17bn over the period, but seasonal factors must also be considered. Summer is a traditionally quiet month for house moves as Britain goes on holiday.


In April, there were 68,076 loans approved for house purchase (up 7.9% on the 63,055 approved 12 months earlier).

And the remortgage market was not left behind either despite super low base rate. There were 35,930 remortgage approvals in April (up 15.8% on the 31,007 approved a year earlier). This was the second consecutive month where remortgage approvals were up year-on-year.

We watched with delight as mortgage rates have fallen to incredible new lows across the board in the last few months.

Fixed rates and variables have collapsed beyond any homeowner’s wildest dreams and they reap the reward of the low monthly cost.

This is partly why so many borrowers are remortgaging despite the very low mortgage rates that usually make people stay put. The rates may be low but there are even lower rates available elsewhere.

In addition confidence in property price rises may also be encouraging many long-term homeowners to release some cash for another purpose. As your biggest asset your home can be a major source of capital if needed.

It is always worth speaking to professional advisers to find out your many options in using your home as part of your financial planning needs.

Bank of England figures also show the number of loans for other purposes, like further advances, fell year-on-year from 11,333 in April 2014 to 10,623 in April this year.

Many are taking advantage of conditions in today’s mortgage and housing markets to make the most of their property value.