June has proved to be a successful time for borrowers as mortgage lenders have significantly increased mortgage approvals to meet their half year targets. It is reported that lending to the lower end of the market remained low and June was in fact the worst month this year for approved mortgages on the cheapest property. However those on higher incomes and purchasing properties worth over £125 000 will have noticed an ease in the market.
The most significant rise has been in London, which saw mortgage approvals rise 12.3 % last month. This included a rise in the number of first time buyers, who accounted for 43% of approvals in total last month. Although this is up slightly from May there is still some way to go to get back to the level of approvals for first time buyers in 2009, which accounted for half of all approvals.
In terms of regions, mortgage approvals last month rose more readily in the South than the North. Approvals rose 12.3% in London and 6.3% in the South East whilst the North East saw a mere rise of 2.8% and in Scotland approvals actually fell by 1.4%.
Richard Sexton, business development director of e.surv said:
“Lenders are stuck between the devil and the deep blue sea. On the one hand, they are bound by tighter regulatory standards and a commitment to improve their capital, while on the other they are being put under political pressure to offer more appropriate mortgage products to match the financial situations of consumers. They cannot do both – these contrasting pressures are entirely incompatible bedfellows. Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter.”
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