Mortgage approvals 'decline'

There has been a sharp drop in the number of mortgage approvals while the level of consumer credit has risen, according to new statistics.

The latest Lending to Individuals report from the Bank of England shows that the number of loan approvals for house purchases fell by 17 per cent between December and January.

However, the figures also show that consumer credit increased by £0.5 billion in the same period.

Meanwhile, figures from the British Bankers Association have blamed the fall in mortgage activity on the winter weather.

Commenting on the news, Darren Cook, spokesperson for Moneyfacts.co.uk, said the drop in mortgage approvals can be attributed to a number of factors, including the trend for a seasonal decline in activity during January.

Furthermore, he said that the recent end of the stamp duty holiday is also likely to have had an impact.

"With many reverting to very low standard variable rates, there is little or no motivation for individuals to remortgage to another deal and restrictive lending criteria makes higher loan to value products expensive," Mr Cook explained.

Britons finding it difficult to secure a loan may find flats to rent in Wandsworth or another area of London offer them more affordable accommodation.

Written by Ben Carter

Published 2nd March, 2010

© 2010 Estates IT Limited