January mortgage approvals increase but still down 43% year-on-year

According to the British Bankers’ Association (BBA), mortgage approvals are up by 4 percent from December, although they are still down by 43 percent from the previous year.

There has been a small increase in the number of people remortgaging as 30,710 loans approved for people who are switching to take advantage of better rates elsewhere, according to the BBA.

In January, total mortgage lending was £2.9bn, down from £3.3bn in December

The greatest problem has been that for many homeowners the fall in house prices has reduced their equity that is needed by most lenders in order to give the most competitive rates.

Whilst for first time buyers the deposit needed in order to secure an attractive mortgage deal is the biggest stumbling block.

The latest figures released show the continued downward pressure on British house prices that are down by 17 percent due to the credit crunch which has made getting finance even more expensive which, in part, has further slowed down the property market.

According to the Royal Institution of Chartered Surveyors and the Nationwide, prices have continued to fall in January, although the Halifax said that property values actually increased slightly, although the conflicting reports are a truer indication of the fragility of the market.

Story link: January mortgage approvals increase but still down 43% year-on-year