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May 26, 2010    

Little evidence of ‘spring bounce’ say BBA

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by Kay Murchie
Little evidence of ‘spring bounce’ say BBA

The British Bankers’ Association (BBA) has today revealed a marginal rise in the number of new mortgages approved by the major banks in April.

According to the BBA, mortgage approvals for the month stood at 35,729 - up by just 685 on March.

The BBA said there is little evidence of the traditional “spring bounce” with net mortgage lending by the major banks dropping to £1.8 billion in the month - the lowest level in more than nine years.

Meanwhile, remortgaging activity continued to remain at low levels - as a result of the low interest rate environment as borrowers opt to stay on their variable rate mortgages.

David Dooks, BBA statistics director, comments: “Household priorities are clearly reflected in these latest data, with people paying down debt rather than building up savings, even in the main Isa [Individual Savings Account] season.

“Uncertainties about the impact of government policies and the economy on households and businesses will continue to dent consumer confidence and influence decision-making,” he added.

Last week, the Council of Mortgage Lenders (CML) cautioned that unless the new Government addresses the urgent issue of funding, then the ongoing lack of mortgage availability could continue for many years to come.

Lending to all house buyers in the first quarter of the year is still way off levels seen during the housing boom, according to the CML.

Meanwhile, in related news, last week the new coalition Government announced it had scrapped Home Information Packs (Hips).

The news was welcomed by estate agents and mortgage brokers who have frequently called on the Government to review the packs, believing them to have contributed to the fall in house prices that followed for many months after they were introduced.

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