Only 1000 mortgages a day being approved by banks

Over the past couple of years, with the credit crisis taking its toll on the UK’s financial sector, many banks have had to be bailed out with the use of taxpayer’s money. However, despite being bailed out via the public purse, and amidst calls for banks to lend more money, the total number of mortgages approved for the month of July was still subdued according to the British Banker’s Association. 

The number of mortgages that were approved for the month of July came to 33,698, and this reflected a fall from the 34,575 for the previous month. In July of last year the number of mortgage approvals was higher, standing at 41,353. Based on the number of mortgages that were being approved prior to the global financial crisis mortgage approval figures have been cut by half. 

The figures came after warnings were issued that homeowners could be paying £1700 a year more for fixed rate mortgages because of the ever increasing profit margins that lenders have been imposing, which are said to be at their highest in two decades. Experts have said that many lenders are refusing to pass on the lower rate of borrowing even though the base interest rate is at an all time low.

Borrowers are also having problems raising the deposits required by lenders, which are still high and in some cases stand at 25 percent or more, and this is also affecting the level of mortgage approvals. With many consumers also concerned about the cost of living, job security, and affordability of goods and services officials believe that it will be difficult to boost the mortgage market.

Ed Stansfield from Capital Economics said: “The latest mortgage lending snapshot from the BBA suggests that growing pressure on household finances, rising fears about job security and still-tight lending criteria are depressing activity in the housing market.”