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Friday 18th of September 2009
July 9, 2009    

House purchase mortgage approvals rise 4%

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by Gill Montia

The Council of Mortgage Lenders (CML) has reported that the number of loans approved for house purchases rose 4% in May compared to April, to 37,400.

However, volumes were 28% down on a year earlier and well below the 96,000 May average of the past seven years.

May remortgaging volumes tumbled 9% on a month earlier to 29,000 and were down 63% on the same period of 2008.

Demand continued to fall away as many borrowers coming off fixed-rate deals reverted to lenders’ relatively attractive standard variable rates.

In addition, lower house prices and tighter loan-to-value ratios left some homeowners seeking to remortgage unable to access the best deals.

CML members approved 14,000 mortgages for first-time buyers in May, up 2% on April, and the Council estimates that around 80% of first-time buyers aged under 30 are likely to have been receiving help with deposits from parents.

However, first-time buyer lending criteria remained steady in May; the average first-time buyer deposit stood at 25% (unchanged from February) and the typical income multiple held at April’s level of 2.97.

Turning to homemovers, the average borrower needed a mortgage to cover 67% of the value of their property in May (unchanged from April) at an income multiple of 2.68, up from 2.63 in April.

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