Increase in Mortgage Approvals as Repossessions Drop

Mon, 28 Jun 2010

Mortgage approvals are rising as repossessions decline.

The number of brand new mortgages approved by key UK banks increased during May to the highest level in 2010. These are the findings of the British Bankers’ Association latest survey this week.

Most recent survey findings highlight that major banks apporved a total of 36,709 loans for property purchases during May. Approvals have increased for the third successive month of increased approvals, after a slow start this year.

Nonetheless, lending is still, with net lending up by just £2.5 billion. The slow start is due mainly to an increased rate of repayment, as borrowers carry on paying debts quicker.

The Financial Services Authority confirmed that during the first quarter of 2010, repossessions were at their lowest level for two years during the first quarter of 2010..

During the first quarter of 2010, properties of 10,500 homeowners were repossessed, 40,500 being entered as arrears. Repossessions have gone down 11 per cent in contrast to the previous quarter.

Lenders are beginning to loosen their criteria for new loans .

Deposits are falling slowly, however, only 2 per cent of the new loans extended during the first quarter had a loan-to-value ratio of 90 per cent plus.

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