After the recent restrictions on mortgage lending, the rate at which applications were being passed dropped, but is now rising again.
The British Banker’s Association (BBA) approved 41,881 mortgages in May, but increased to 43,265 in June. This is still 13.5% higher than a year before.
New restrictions came into effect in April in order to put a stop to the amount of mortgages being approved that were at a high risk of not being repaid.
This was supposed to stop the banks from falling into trouble again as they did before the economic crash, and make sure they were less likely to lose money as people fell into arrears.
After reports that the lending rate dipped as these new restrictions came into play, these figures suggest that the rate is again increasing and banks are lending more.
It is apparently too early to tell whether this dip was actually due to the tighter restrictions or as a result of hold ups during the time when the new processes were brought into effect.
“The jury is still out on exactly how the new rules are affecting customer applications or approvals” said Richard Woolhouse, chief economist of the BBA.
“These figures show that mortgage approvals are rising again after four months of decline. That’s encouraging because those decisions are a leading indicator of what’s happening in the housing market” he added.
Hopefully the increase in lending is a good sign and will allow more people to begin to afford houses, without stretching their budgets to breaking point.
