Fall in mortgage approvals

Fall in mortgage approvals

Mortgage approvals in the UK continued to fall for three months to May, according to new figures.

The latest research by the Bank of England (BoE) showed that while mortgage approvals dipped, gross secured lending remained broadly the same in the same period, with an average monthly net lending flow of £1.8billon.

SME lending over the same three month period saw a return to a positive flow, according to the BoE analysis, turning the tables on a disappointing previous quarter.

The news has prompted mixed advice from experts, with Brian Murphy, head of lending at Mortgage Advice Bureau saying: ‘On the one hand, interest rates are creeping upwards, homes for sale are scarce and new measures are keeping lending activity in check.  

‘On the other hand, the clock is ticking down on cut-price borrowing and aspiring buyers will be conscious that their mortgage costs may be significantly lower if they can buy before rates — and house prices — climb any higher.’

But Stephen Johnson, managing director of commercial mortgages at Shawbrook Bank wanted lenders to concentrate more on SME’s, saying: ‘Last quarter’s growth in lending is positive but to see a real shift, lenders need to make sure the way they interact with SMEs fits the business requirements of a small business.’

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