By Kate Brown
UK Finance reported that British banks approved 36,115 mortgages in December 2017, which is the lowest figure since April 2013. The monthly average for lenders mortgage approvals has been 51,609 for the last 20 years.
This drop in mortgage approvals took place despite the increasing number of first-time buyers through Government schemes, whereby initiatives such as Help to Buy and the Lifetime ISA (LISA) allow for a 25% bonus to be added to the savings for a first home.
Mortgage approval rates are likely to have decreased due to the added pressure for individuals to save and/or restore finances. In December 2017, the UK property market saw a 5.1% increase in house prices whilst real earnings saw a 0.4% decrease and remained negative.
The Bank of England issued an urgency to lenders to reduce unsecure lending, whilst an increase in household debt was reported.
However Eric Leenders, Managing Director of Personal Finance at UK Finance, described these figures as being “driven by a competitive market” and said, “December is traditionally a quieter month for mortgages”.
Recent changes such as the cut in stamp duty for first-time buyers may be yet to show positive effect on mortgage approval rates.
If you’re looking to review your current borrowing and would like to discuss mortgage plans, feel free to contact Knowles Warwick Financial Services who may be able to help you.
For more comprehensive figures see Economic Update (UK Finance).