6
Jul
Mortgage Approvals on the rise...
The property market continued to pick up in May, according to
figures from the Bank of England.
The number of mortgages approved for house buying rose to 43,414,
up from the figure of 43,191 the month before.
It was the fourth month in a row that approvals have risen,
suggesting that the recent increase in sales is likely to
continue.
Recent evidence from lenders has also suggested that the slump in
house prices is slowing down.
The Bank of England's figures show that net lending for house
buying in May, by all lenders, grew by just £324m - the
smallest monthly increase on record.
"Bank of England data suggests that mortgage approvals for house
purchases only rose modestly in May," said Simon Rubinsohn, chief
economist at the Royal Institution of Chartered Surveyors.
"While mortgage approvals by banks actually rose by around 2,500,
loans from building societies and other specialist lenders both
fell during the month," he added.
'Depressed' activity
The Building Societies Association (BSA) said approvals by its
members in May were still about 35% lower than in May last
year.
"Therefore, while the mortgage market appears to have recovered
slightly from the start of the year, levels of activity remain
depressed," said the BSA's director general Adrian Coles.
Building societies saw their savers withdraw more money than they
put in, for the third month in a row.
"Those banks that are supported by the state are able to compete
unfairly for retail deposits, and steps need to be taken to ensure
that government backing for some institutions does not distort
competition for savings," complained Mr Coles.
"These pressures are exacerbated by the current low interest rate
environment; there is evidence that households are looking to repay
debt rather than save," he added.
Net lending by building societies shrank for the fifth month in a
row, reflecting the fact that borrowers have been repaying their
mortgages at a faster rate than they have been taking out new home
loans.