UK mortgage approvals drop

Posted 15 September 2014 by Keith Osborne

There was a slight fall in the number of mortgage approvals in July as tighter lending rules continued to have an impact on the market, the latest figures from the Bank of England show.

The fall in mortgage approvals in July had been anticipated by many experts, as tighter lending rules created in response to the Mortgage Market Review (MMR) and new Bank of England measures, continue to adversely impact on approvals.

The latest data from Bank of England show that mortgage approvals dropped to 66,569 last month, down from 67,085 in June, which is significantly below the 90,000 level recorded before the 2008 financial crisis.

The marginal fall in mortgage approvals in July followed on from a rise in June, which was the first increase in mortgage approvals for five months.

The volume of mortgage approvals have been falling ever since tougher lending rules were introduced earlier this year, while the MMR, which came in to play in April, has created further lending restrictions in order to protect the property market from another 2008/2009-style crash.

Despite the overall dip in mortgage lending, the number of mortgages handed to first-time buyers is rising.

According to the latest figures released by the Council of Mortgage Lenders, there were over 30,000 mortgages issued to those people acquiring property for the first time in August – the highest level since August 2007, when 35,300 mortgage applications were approved.

“First-time buyers are returning in their droves,” says Richard Sexton, director ofe.surv chartered surveyors. 

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