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Mortgage approvals at five year high

01/10/2013

The Bank of England has announced that the number of mortgage approvals hit a five-and-a-half-year-high in August.

Mortgage approvals rose to 62,226 in August from 60,914 in the previous month. However, these levels are still below both pre-recession and long-term averages. Samuel Tombs, UK economist at Capital economics noted that despite growth, the market is still relatively weak, stating that levels are “still 40% down on the levels seen before the financial crisis,” whilst he also noted that net mortgage lending in August had risen to £1 billion in comparison the average of £0.7 billion in the previous years.

These figures were announced following news that the second stage of the Help to Buy scheme was to be implemented three months earlier than originally planned, after the scheme which allows people to buy new homes with a 5% deposit was adjudged to be a success by the coalition government. However, the scheme will now allow people to buy existing homes under the same conditions.

Prime Minister David Cameron, rejected fears the Help to Buy scheme would fuel a housing bubble, claiming that the market was "recovering from a very low base" and first-time buyers needed help to get on the housing ladder.

Critics say the Help to Buy scheme does not address the issue of high demand for a limited supply of properties, prompting concerns about affordability, with the British Chamber of Commerce denouncing the decision to bring the second stage of the Help to Buy scheme as “less than responsible.”

If you feel this news affects you, or you feel unsure about your mortgage situation, our qualified financial advisers are on hand to answer any initial questions you might have free of charge within 60 minutes* during office hours.


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