Financial News

  • 28 May 2014, 12:54

Mortgage Approvals Decline For Third Month

High street banks have reduced the number of mortgage approvals for the third month in a row, despite their total value reaching a six-year high.

The British Bankers' Association (BBA) said 12.2bn in loans were activated in April.

The total was 52% higher than the same month last year and the strongest monthly figure since August 2008.

But the increased value of mortgages, combined with the reduced volume of loans gives a "mixed" picture, according to the BBA.

It said more than 42,170 home loan approvals, valued at 6.9bn, were approved - the lowest volume for eight months.

Mortgage approvals have continued to decline since 48,000 were recorded in January.

However, when seen against the April 2013 approvals, it remains 25% higher.

Property schemes such as Help to Buy were rolled out in the latter part of last year, boosting first-time buyer access to mortgages.

The BBA said borrowing for businesses also contracted by 1.9% in the year to April.

But that compared to a reduction in borrowing of 5.1% in the 12 months to April 2013.

BBA chief economist Richard Woolhouse said: "Our figures show the housing market is mixed.

"The value of mortgages taken out in April was the highest for six years.

"The amount of borrowing is, however, still well below the levels we were seeing before the financial crisis."

The easing mortgage approval rate comes after the Mortgage Market Review (MMR) was introduced last month, designed to better calculate applicants' ability to pay if loan rates rise in the future.

Surging home prices - 8% across the UK and 17% in London - have also pushed a belief that the Bank of England may take other measures to calm the market.

The BBA report also said that 8.1bn was put on credit card debt in April, 4.9% more than in the same month a year earlier.

It said: "Higher loan demand continues to reflect rising consumer confidence and an improving economy."

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