Mortgage Approvals Remains Low Despite All the Efforts

Despite government efforts to improve mortgage lending, figures published by the BBA demonstrate no improvements.

On the contrary, the total number of mortgages approved in July was just 33,698, which is less than June figures by 877 and 7,655 less than for July of the previous year.

The average value of the mortgage loan intended for house purchase in July stood at £148,500, £2100 lower than in June and May.

Efforts to stimulate the mortgage market are not showing desired results as borrowers are still struggling to find many competitive mortgage deals above 75% LTV.

With forecasts suggesting that the current recession could take another dip, borrowers are apprehensive to move or even change their lender. Job cuts and tighter lending criteria are not appealing to many borrowers and even the abolition of HIPs didn’t seem to make a big difference.

Commenting on these figures, BBA statistics director, David Dooks said: "Gross mortgage lending remains stable, although demand for mortgages continues to be subdued. The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.”

Despite the fact that mortgage rates are quite low, many borrowers are not happy that banks are not prepared to share with them their profit margins.