Mortgage approvals drop 10% in October: BBA

October house purchase approvals were 10% lower than in October 2015 and in the first ten months of 2016 were 4% lower than in the same period of 2015, according to the latest BBA high street banking statistics.

Related topics:  Mortgages
Rozi Jones
24th November 2016
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"An annual decrease in mortgage approvals reflects a more cautious approach from lenders, likely as a result of the current uncertainty in the housing market and wider economy."

Remortgaging approvals were similar to those in October 2015 but in the first ten months of 2016 were 13% higher than in the equivalent period of 2015.

Gross mortgage borrowing of £12.2bn in the month was 4% lower than in October 2015, however net mortgage borrowing rose by 2.5%.

Matt Andrews, Managing Director at Bluestone Mortgages, commented: “An annual decrease in mortgage approvals reflects a more cautious approach from lenders, likely as a result of the current uncertainty in the housing market and wider economy.  However, fewer approvals and the continuing squeeze on affordability is pricing an increasing number of would-be homeowners out of the market.
 
“The borrowers who are set to suffer the most under these conditions are those who do not fit traditional high-street lending criteria. Automated credit scoring models seldom take into account the nuances often found in the credit profiles of contractors, the self-employed, or those with  adverse histories.

“Yet the UK workforce is changing – contractors have grown by 35% in the past three years alone. If more lenders were to offer a more personalised underwriting experience, working to understand the factors behind an individual’s circumstances, we would see  an increasing number of hopeful buyers achieve their goal of homeownership.”

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