The number of mortgages approved for house buyers in December rose slightly to 60,275, higher than in November but 17 per cent down on December 2013, according to the Bank of England. As this is the first rise in mortgage approvals for six months, it suggests that the weakening in the housing market may be coming to an end.
In another survey, the Bank of England reported that mortgage approvals for remortgaging were lower than at the start of the year. This is surprising when you consider how rates have continued to fall to record lows. However, the introduction of the mortgage market review last April contributed to a slowdown in the market with tighter criteria making it more difficult for many borrowers to get funding. Some of those who are coming up to remortgage in particular will have been scared off doing so by the negative coverage and may be prepared to sit on a higher standard variable rate rather than risk being turned down by a lender.
According to the Bank of England, lenders don’t expect mortgage rates to fall significantly in coming months. This is no doubt because they are already so low, so borrowers holding off and waiting for them to fall further might want to consider securing a rate now. Rather than cutting rates further, we expect lenders to turn their attention to criteria and it would be welcome to see some easing on this front this year, particularly for older borrowers.
If you have any concerns or questions about funding, do get in touch.