UK Mortgages Bounce Back: Approvals Rise 8%
3 minute read
The first months of 2014 were not walk in the park for UK mortgage seekers, even those with spotless credit reports not in search of bad credit mortgages. Back in April, more stringent tests hit the mortgage lending world, making it harder for all prospective home-buyers to source the mortgage they were looking for. With mortgages harder to come by, and much more rigorous affordability testing from lenders, it looked like 2014 was not going to be a great year for the UK’s housing market, with many economists pointing to signs of a slowing housing economy. Bounce back Fortunately, June 2014 saw the market rallying as lenders began to let go of their vice-like grip on their purse strings. Statistics from June show that mortgage approvals rose by 8%, making it the first month in 5 to see a positive increase in lending to house-buyers. Although economists had predicted a rise in approvals, estimating a relatively small jump to 62,600, the market exceeded expectations, with approvals rising 8% to hit 67,196. This jump could well be a bounce back for the UK’s slowing housing market,which is good news for lenders. Is it a blip? However, it’s also been suggested that this is a momentary blip. In June, the Bank of England announced that on top of April’s raft of tougher affordability tests, they would also be implementing measures aimed to prevent a build-up of risky mortgages – a problem often cited as a factor in 2007’s credit crunch. The effect of these new measures on the year’s mortgage approval figures remains to be seen. Although approvals rose in June, the UK are still a long way away from the approval rate seen in pre-credit crunch Britain. Prior to 2008, monthly mortgage approvals were at 90,000 per month. The highest rate the UK has enjoyed since that point was 76,000 in January 2014, before the implementation of more stringent borrower checks. What does this mean for mortgage seekers? June’s rise in approvals may be a positive sign, but it is too early for the market to expect a steady return to pre-2008 levels. With more Bank of England measures to come, and a general feeling of caution amongst economists, banks and lenders, it’s likely that we will see future dips in approval rates. For those of you seeking bad credit mortgages, this will make sourcing an affordable mortgage no easier. If you were hoping that a rise in approvals meant that lenders were loosening up, you may be disappointed, even with a significant deposit. Yet finding a mortgage in the current climate is not impossible. Our team of mortgage experts have the knowledge and experience to broker a bad credit mortgage which works for you and fits into your finances. To learn more talk to our team on freephone 0800 9777840 today.