Mortgage approvals have a spring in their step

According to the Council of Mortgage Lenders (CML) mortgage approvals have risen by 16% month-on-month in April, standing at 28% lower than April 2008.  The CML accounts for around 98% of the market and stated that 35,600 mortgages were granted during April.  The actual loan value of £4.5 billion was again up 16%, but down by 40% against the previous April.

The majority of the new loans were for those moving home rather than first time buyers who are still having to come up with an average 25% deposit so there was a more modest increase of 13% on approved mortgages. CML head of research, Bob Pannell said: ”With the interest rate cycle now at its floor, an increasing proportion of borrowers are taking out fixed rates, including for longer term periods of 5-10 years. With expectations for rates to remain low in the near future, shorter term fixed-rate deals are less appealing than attractively priced variable rate deals.”

The Royal Institute of Chartered Surveyors recently reported that enquiries from buyers through the month of May rose for a seventh month running and this is at a rate last seen in August 1999.

Bob Pannell concluded: “There are tentative signs of house purchase lending stabilising, but we need to see considerably higher transaction levels to underpin house prices.”

Related posts:

1. Fixed Rate Mortgage
2. Offset Mortgage – what is an offset mortgage?
3. Fixed Mortgage Rates – fixed mortgage rates and money printing
4. Life Assurance – Mortgage Protection Life Assurance Basics
5. Variable Rate Mortgage