You are here: Home - News -

BBA: Remortgage approvals rise 28%

  • 23/02/2011
  • 0
BBA: Remortgage approvals rise 28%
The number of remortgage approvals recorded by the main high street banks rose 28% year-on-year in January 2011, according to the British Bankers’ Association (BBA).

Its figures revealed that January’s total of 26,106 remortgage approvals was up 5% on December 2010, but remained far removed from the recent high of 75,799 in January 2008.

By comparison, house purchase approvals in January were 29% down year-on-year at 28,932 and largely unchanged on December 2010. The average value of loan for house purchase was 2.7% lower than January last year at £135,200.

BBA figures also showed that approvals for equity withdrawal continued to be weak, 7.8% down on January 2010 at 15,207.

Meanwhile, as high street lenders’ gross mortgage lending remained largely static, net lending increased by £1.6bn in January compared to £.09bn in December.

In addition, the main banks’ net lending annual growth was 2.7% compared to 0.7% for the whole of the market.

High street gross mortgage lending was £8.15bn January 2011, up from £8.05bn the previous month and slightly higher than the recent six-month average of £8bn.

Year-on-year, January gross mortgage lending was up 2%.

David Dooks, statistics director at the BBA, said: “We are seeing little change in the borrowing environment for households or businesses at the start of 2011. The high street banks have seen more remortgaging activity of late as people look to fix costs. The banks’ mortgage lending growth continues to exceed the rest of the market.”

The main high street banking groups account for two-thirds of all UK mortgage lending and include Santander UK, Barclays, HSBC, Lloyds Banking Group, Northern Rock and RBS.

Richard Sexton, sales director of e.surv chartered surveyors, said: “Both lenders and buyers are operating with caution. Fears over the economy have made buyers cautious and exacerbated the underlying weakness in the housing market.

“This is a two-tier market. Wealthier borrowers have heftier deposits to side-step restrictive lending criteria, so approvals are holding up well on expensive properties and are cushioning the overall figures.”

He added: “The spectre of interest rate rises will frighten the remortgage market back into activity after a Christmas lull and this will be reflected in February’s figures and beyond. The recent addition of several higher LTV products by some lenders offers some hope of improving conditions, but appetite for this higher LTV business may prove short lived.”

Paul Hunt, managing director of Phoebus Software said: “The mortgage market is still nervous about the UK’s economic future. While net lending rose in January, this was by no means a lending tsunami.

“With the impact of public spending cuts on unemployment and borrowers’ finances still uncertain, it’s far too early to start taking small increases in lending as signs of an ongoing recovery in the market. Lenders are still primarily concerned about repayments rather than growth and until the economic future looks more certain, this will remain the case.”

There are 0 Comment(s)

You may also be interested in