Although lenders have been increasing efforts to attract new customers with lower rate mortgage products, the number of mortgages which have been approved has fallen for the second consecutive month.
In March, 66,837 house purchase mortgages were approved, which is 1.6% lower than in February. Re-mortgage loan approvals also fell during March. Lenders have introduced a number of new mortgage deals, with low rates in a bid to encourage new custom, especially during recent weeks.
Competition increased with two new products; Yorkshire Building Society introduced a two-year deal at 0.89% and HSBC launched a five-year deal at 1.69%. Although lenders want new custom, the affordability criteria is still tight.
A report which had previously been released has suggested that parents are now the 10th biggest UK mortgage lender, as more buyers are turning to parents for financial support. According to a report released by Legal & General, £6.5bn will be loaned by parents this year.
Data released by the Bank of England shows that consumer credit is continuing to grow, with an 11% increase in overdrafts and loans during the 12 months to the end of March 2017. Jane Tully, the director of external affairs for the Money Advice Trust, which runs National Debtline, stated that if the economy weakens over the next few months, some of those who are currently coping with their debts may start to struggle.
Mortgage advisers learn about all aspects of mortgages, including affordability, when they study on a CeMAP course, which is why it is advisable to seek their advice prior to taking on a mortgage.
