Homebuyer mortgage approvals up 81%, remortgages down 47%

Wednesday, 23 September 2009 10:52

Homebuyer mortgage approvals rose 81 per cent in the last year, but remortgage approvals are down 47 per cent.

Data from the British Bankers Association (BBA) show a small dip in approvals in August for home purchase mortgages - but strong growth since the start of the year.

The average homebuyer mortgage was for £134,500.

However, the drop in remortgage lending - as borrowers stick on lower standard variable rates (SVRs) instead of re-fix or find they cannot re-fix due to lack of equity - pushed gross mortgage lending down 33 per cent on a year ago.

Despite the number of approvals rising, the market remains depressed.

In August 2007, as the ill winds of the credit crisis started to bite and Northern Rock wobbled, there were 168,291 mortgage approvals recorded.

In August 2009, 82,137 approvals were reported.

Andrew Montlake, director of independent mortgage broker Coreco, suggested the worst of the crisis now may be over.

"However, this is likely to be a long, slow recovery due to a lack of readily available housing stock and mortgage lenders' continuing insistence on borrowers with high deposits or significant equity," he said.

"First-time buyers and borrowers with small deposits are still finding it very difficult to secure mortgage finance."

The BBA also issued data for loans and credit cards.

Brits in August continued to be more cautious about splashing the plastic.

New spending on credit cards was down 13.6 per cent on a year ago to £5.6 billion and repayments stood at £5.8 billion.

The UK's overall credit card bill is £24.9 billion.

Personal loan lending was down 37 per cent to £1.3 billion of new loans in August.

The British collective overdraft is now £9.9 billion.

However, the BBA also reported savings took an upturn "as individuals continued to bolster their financial position by building deposits or repaying borrowing".

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