BBA: mortgage approvals hit 16 month high
The British Banker’s Association said that the number of new mortgages approved in May rose to 36,100 from April’s revised total of 33,000.
Jonathan Harris, director of mortgage broker Anderson Harris, said: “The mortgage market continues to improve with borrowers attracted by lower rates and easing criteria.
“Help to Buy is already helping first-time buyers and is expected to give a further boost to this group, as well as second steppers, from January when the guarantee element of the scheme is rolled out.”
However Harris wanrned that there are fears in some quarters that mortgage rates will start increasing soon on the back of rising Swap rates.
He said: “There is no need to panic but it is worth seeking independent mortgage advice if you are concerned. We expect mortgage rates to continue to be extremely competitive in coming months as lenders vie for business.
“Borrowers who can afford to do so continue to overpay on their mortgages, taking advantage of record low interest rates, and pay down debt where they can.
“This makes sense – why leave savings languishing in accounts paying such poor rates of interest when you can reduce your borrowing? There is also a reluctance to take on extra borrowing because of the uncertain economic and jobs climate.
‘While lending volumes are improving, we remain some way off a sustained recovery in the housing market as caution continues to prevail.
“However, mortgage brokers and estate agents are still reporting a high level of enquiries so we expect this to continue to feed through to improved official figures in coming months.’