The Bank of England’s latest mortgage approval figures show mortgage lending fell by 12% in February. Loans secured on property fell from 108,767 in January worth £13.1bn to 95,976 in February worth 11.7bn. Within this figure loans for house purchase fell from 57,899 in January worth £8.7bn to 48,986 in February worth £7.1bn. I suspect March’s figures will return to an
increase as it was incredibly busy throughout the month!
In comparison, gross mortgage lending by building societies and other mutuals rose 28% year on year in February 2012, figures from the Building Societies Association data shows. New mortgage approvals were up 31% on February 2011 and with gross lending at £1.9bn. This sector of the market appears to have a huge appetite to lend and some great product innovation.
Interest only remains in the spotlight with suggestions from Unbiased.com that one in seven UK households are sitting on an interest-only mortgage with no repayment vehicle. The website suggests that 1.6m properties are simply paying off the interest each month and not repaying capital or saving anything towards paying off their mortgage debt in the future. This is a pretty scary and certainly something that requires a review and not left until ‘tomorrow’. Speak to a independer adviser and work out a repayment plan.
Finally, the Leeds Building Society are the latest to reduce interest only mortgages to 50% of the property value and the Co-Operative Bank have increased their Standard Variable Rate
(SVR) from 4.24% to 4.74%. I’m still unsure how this fits within our markets regulatory rules of ‘Treating Customers Fairly’…