Mortgage approvals increase to 14-month high

 

The squeeze on mortgage borrowers is easing, according to lending figures released yesterday by the Bank of England. Approvals for home purchases in July numbered 49,239, up from 48,500 in June. Approvals are now at their highest level since May 2010 as building societies and banks continue to increase their lending to prospective home buyers.

However, mortgage lending remains at around half the levels seen in the years before the 2008 financial crash. "It's difficult to get too excited about the pick-up in mortgage approvals," Andrew Goodwin, the senior economic adviser to the Ernst & Young Item Club, said. "Although this might have been a 14-month high, it's still very low in a historical context and the market remains essentially stagnant."

Such a pessimistic view is supported by new research from Oxford Economics, commissioned by the National Housing Federation (NHF), which projects that home ownership levels will fall to 63.8 per cent over the next decade as banks continue to demand large deposits from first-time-buyers and high prices exclude most young people from the market.

Oxford Economics also found that lenders' attitudes to borrowers are hardening in some regions – particularly the North of England – which have poor economic prospects.

David Orr, the chief executive of the NHF, which represents housing associations, said: "Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy. And for the millions locked out of the property market, the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels."

The Housing minister, Grant Shapps, admitted in response to the report that "we have not been building enough homes" and reiterated the Government's pledge to increase the supply of affordable new houses in England by 170,000 over the next four years. Yet some analysts argue that the number of new homes required to meet demand is considerably higher. The Home Builders Federation says fewer homes are being built in England than at any time since the 1920s.

Other figures from the Bank of England yesterday show that total levels of outstanding consumer credit fell in July to £209.4bn, down 12 per cent from the peak of £236.8bn in September 2008. Net consumer credit increased by £200m in July, down from £400m in June. Credit card lending rose by just £259m, while borrowers repaid £54m of other loans and advances. While paying off debt can be a sensible move by individuals, the concern is that if people do so simultaneously, overall consumer demand in the economy will collapse.

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

    Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

    £50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

    Recruitment Genius: Security Officer

    £16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

    Ashdown Group: Business Analyst - City, London

    £50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss