Mortgage approvals increase in June as lenders rush to meet targets
While the British summertime once again falls short, the sun did shine brightly on borrowers in June with mortgage approvals increased by 6.7 per cent.
The capital saw the best of it; mortgage approvals in London were up 12.3 per cent while approvals in the South East increased by 6.3 per cent. It was slightly cloudier up north; the North East had a rise of 2.8 per cent.
However, these sunny spells did not extend to the out-in-the-cold first time buyers for whom June was actually the worst month this year, claims e-Surv, the surveying and valuations business of LSL.
Mortgage approvals for homes valued under £125,000 – by and large the targeted properties of first time buyers – fell by 1 per cent month on month. Approvals for homes under £125,000 accounted for only 22 per cent of all approvals in June, the lowest level since November 2010.
Richard Sexton, Business Development Director of e-Surv said:
“Lenders are stuck between the devil and the deep blue sea. On the one hand, they are bound by tighter regulatory standards and a commitment to improve their capital, while on the other they are being put under political pressure to offer more appropriate mortgage products to match the financial situation of consumers.”¹
Understanding this difficult situation, Sexton therefore does not believe June’s significant rise is likely to continue into the next quarter.
“[…] after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter.” ¹
¹Today Conveyancer (July 2011)
Content correct at time of publication