The number of mortgage approvals continues to rise as the usual ‘spring bounce’ in the mortgages market has finally arrived, albeit two months later than normal. Remortgages are driving the market at the moment, according to the British Bankers’ Association (BBA).
While existing homeowners continue to focus on overpaying on their mortgages or clearing other debts, remortgages still managed to account for the bulk of mortgage lending. Remortgages accounted for 24,626 of the 36,709 mortgage loans approved. Remortgaging and equity withdrawal approvals taken together were, however, still lower than a year ago, the BBA said.
Sales of properties remained fairly flat however, with 73,000 homes sold during May, compared with 72,000 in April.
The average value of homes purchased during May was £150,500, which was up 10.5% on last year’s May figures.
The BBA’s figures also confirmed the level of credit card purchases was generally subdued, and down on the six-month average, reflecting again the focus on clearing rather than creating debt. Demand for personal loans was also down on a year ago, according to the BBA.
“High street banks are the main providers in the mortgage market, supplying 75% of all new lending and approving more than 35,000 loans for house purchase each month. The low interest rate environment is resulting in customers choosing to reduce or pay off borrowing, particularly personal loans, rather than saving,” said a BBA spokesman.
