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April mortgage applications down 21%

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  • 10/05/2011
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April mortgage applications down 21%
Mortgage applications have dropped 20.9% in one month, according to mortgage advisers the Mortgage Advice Bureau and Coreco Group.

This compares to an 11.6% rise in applications in March compared to February.

The number of borrowers choosing fixed rate products dropped slightly to 76% of all mortgage applications in April from 80% in March.

The average mortgage application loan size in April was £124,328 compared to £127,546 in March, a fall of 2.5%.

The average LTV on mortgage applications rose slightly to 70.5% in April from 69.9% in March and the average deposit put down by a mortgage applicant in April was £52,024 compared to £54,923 in March.

The average age of a mortgage applicant in the UK in April was 38 years old.

Remortgage applications fell further in April by 26.7%, but remain nearly 20% up on the previous year.

Brian Murphy, head of lending, independent mortgage broker Mortgage Advice Bureau, said: “April mortgage activity has been significantly curtailed due to the bunching of the four public holidays.

“Mortgage product availability improved further in April, and the number of deals available now is more than 20% above what brokers typically had access to at the beginning of this year, and more than 50% up on the same period twelve months ago.

Murphy said the flurry of lenders re-pricing deals at the end of April should offer borrowers more choice.

In London, the average LTV on mortgage applications (excluding remortgages) was 64.4% in April compared to 66.2% in March, with the average deposit put down by a mortgage applicant in April at £155,124.

Mortgage applications (excluding remortgages) were down 42% in April compared to March and 58.2% of applicants chose fixed rate deals in April compared to 67.4% in March, a drop of almost 10%.

The average age of a purchase mortgage applicant in London in April was 37 years 5 months.

On the remortgage side, the average LTV on remortgage applications in April was 51.8% compared to 52.6% in March, while the average loan size increased substantially from £237,110 in March to £255,401 in April.

Andrew Montlake, director, London-based independent mortgage broker Coreco Group, said: “With many in the City having tempered their interest rate expectations, tracker rate products are back in vogue with an increasing number of London buyers, with 40% of borrowers choosing variable/tracker products, reflecting the view that a summer rate rise is now potentially the only one expected this year.

“Remortgage activity is likely to remain static until the third quarter when we could see an Autumn mortgage price war between competing lenders and the prospect of serious rate rises edges closer.”

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