Mortgage Approvals Rise in September - CML

The latest figures published by the Council of Mortgage Lenders show that the number of approved mortgages loans increased in September, marking the 3rd consecutive month of growth. Interestingly, first-time buyers accounted for the vast majority of granted mortgages. According to CML report, the month-on-month increase in the number of approved mortgage loans amounted to 2%. More than 50,000 mortgage loans were given out to borrowers in September 2009, which is 43% more than at the same time last year. Out of these 50,600 mortgages, 19,700 loans were granted to first-time buyers, representing a 5% increase on August 2009. The number of approved mortgages for borrowers moving homes stayed the same as in August. Also, a significant rise in the number of approved remortgages was highlighted in CML report; remortgages now stand at 33,000 – a 10% increase on August 2009. However, CML experts insist that the choice of mortgage offers is still scarce, especially for first-time buyers. Most UK lenders now offer no more than 75% loan-to-value ratio to first-time buyers, which is 9% lower than in September 2008. In the opinion of Mr. Howard Archer, Global Insight economist, low mortgage interest rates are not enough for the recovery of the UK property market; they are to be coupled by high market activity, low unemployment rate, and growth of earnings, but none of the above is currently true of the UK market environment. Experts at the Council of Mortgage Lenders link the increase in mortgage approvals seen this September to the desire of borrowers to benefit from the stamp duty holiday, which is expected to expire at the end of the year. Mr. Paul Samter, CML economist, is determined that stamp duty holiday is a very important factor that contributed to increased buying activity on the low end of the property market this autumn. He, however, said that the current boost in activity is still not enough to bring the UK property market to its “normal level”.