The Bank of England Published a New Report on UK Mortgages

The data published by the Bank of England on Monday, June 29th, revealed that net lending to individual borrowers by UK lenders increased only by £0.6 billion in May – the figure is lower than that of April and than the 6-month average. Net mortgages lending amounted to up £0.3 billion in May with a larger number of approved mortgage loans than in May and than in the previous 6 months; at the same time, the Bank of England’s report suggests that the number of loans approved for remortgaging was lower. Commenting on the report, Mr. Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS), said that the organization is determined that the May increase in the number of approved mortgage loans can only be labelled as “modest”. Despite the fact that at first glance the data published by the bank of England is inconsistent with the information, recently revealed by the British Bankers’ Association (BBA), a more detailed review helps to explain the difference. In fact, while UK banks have increased the number of mortgage approvals to 2,500, British building societies and other lending bodies saw a decline. Mr. Rubinsohn also added that the level of remortgaging activity hit another low in May. He said that RICS experts explain this fact with the owners’ satisfaction with their low SVR mortgage rates, to which they have recently moved. Another reason for low remortgaging activity might be the difficult financial situation that homeowners in negative equity face. While the report published by the Bank of England is quite gloomy, the latest data revealed by the National Association of Estate Agents (NAEA) is much more inspiring. The NAEA claims that 30% of UK estate agents have marked a 10% increase in the number of properties coming onto the UK market, which represents a positive trend of a recovering industry.