More worrying signs for the mortgage broker, as signs are showing within the market that there could be a quieter period in house completion figures over the next few months.
Bank of England data has shown an increase in household applications being rejected within the economy, however, loans for house purchases did indeed increase in April to a figure of 40,900. The figure of £5.9 billion is up from £5.5 billion in March; a £0.4 billion increase.
There is likely to be a significant increase in remortgage applications over the next few months due to likely trends which could see a rise in the Bank of England base rate. However, figures in April also have shown a fall in remortgage approvals from the major High Street mortgage lending institutions, who continue to be risk averse and reluctant to lend.
The managing director of ‘Mortgages For Business’ David Whittaker, today announced ‘A month of growth in mortgage market activity may be enough for some to herald recovery but one swallow does not make a summer. Lenders and government must come up with a sensible balance of capital requirements and lending targets, if they don’t the market will be stuck in the doldrums for a long time to come.’
It should not be underestimated that a rise in loans offered in monetary terms continues to show that the economy is still slowly improving. However, the slightly damning reality is that with an increase in mortgage application rejections, the rate of recovery is somewhat slowing. A subdued summer looks likely once more for the mortgage industry, with many mortgagees and mortgage broker’s perhaps relying on an influx of remortgage applications to boost business.
It is increasingly looking like it is mortgage lenders and mortgage lenders only who can start a new momentum for lending and an increase in successful applications within the economy. Today’s news continues to be disappointing for the first time buyer, with May 2011 seeing just 23% of applications accepted. Until the mortgage market picks up, the current and seemingly continual struggle looks set to continue for individuals throughout the UK.