Thursday, 17 August 2017

Good news for mortgages

MORTGAGE approvals bounced back in March from February’s five-month low, according to new data from the Bank of England.

MORTGAGE approvals bounced back in March from February’s five-month low, according to new data from the Bank of England.

In addition there was a “marked decline” in people reporting that a lack of mortgage availability is stopping them from buying a house, as the Government’s Funding for Lending scheme (FLS) continues to have a positive effect, creating higher demand for properties. Introduced last August, it has prompted lenders to slash their rates as they are given access to cheap finance to help borrowers.

The typical proportion of the asking price achieved on property sales in the city now stands at more than 95 per cent — a key sign the health of the London market has recovered to levels not seen since the property boom in 2007. This figure is also more than 95 per cent in the South East, and 93 per cent in the rest of the country.

There are also hopes that an increasing number of people around the country are embarking on a property search as the summer arrives and the weather starts to warm up, with homes now taking a week less to sell on average than at the start of the year.

Stephanie McMahon, head of research at Strutt & Parker, comments: “The rebound in mortgage approvals is encouraging, however, if the number of those buying and remortgaging is to be seriously boosted, lenders need to address better rates at higher loan-to-values.”

The FLS, which offers lenders better value funding than that available in financial markets in return for raised lending to households, has already helped lower mortgage rates since its inception. It has also helped reduce the cost of borrowing for buy-to-let landlords, leading some to dub it the “Funding for Landlords” scheme.

Lenders have been innovating with deals that require smaller deposits for customers at the lower end of the market in a bid to attract first-time buyers, which in turn could help to unlock chains higher up the ladder.

Ms McMahon believes that mortgage rates for homeowners and landlords are likely to remain low for the next two years. She said: “the package reforms from the BoE will see the scheme run for longer as well as increasing the number of incentives available to banks to lend to small businesses.”

More News:

Latest video from

VIDEO: Jess Glynne opens Henley Festival in style
 

POLL: Have your say