Today it was announced by the British Bankers’ Association (BBA) that there was an increase in mortgages approved for property buyers, apparently the highest number of mortgages approved for over 12 months. But, is this just some PR on behalf of the banks to “improve their reputation”?
The fact is that there is normally an increase in buying activity as we move into the summer months, so it would be expected to see an increase in the number of mortgages approved. So the totals of 35,235 mortgages approved in June versus 31,919 in May is normal, to be expected.
The real test is how much is being lent versus the typical year prior to the credit crunch. The BBA do not seem to publish this information as it will almost certainly show the mortgage lending to property buyers is still at a very low level. You only have to look at the difficulties people are STILL experiencing in obtaining a mortgage with unrealistically high levels of deposit. Why do banks need 15% to 25% deposits when based on the assumption property prices do not have much further to fall mortgages with just 10% deposit (which are hard to get approved) can be considered secure.
The bottom line is that although the banks are finding the market difficult for raising funds they are still not doing enough to improve mortgage borrowing, despite what the BBA may publish.
