Mortgage approvals down by 20% in November
The number of mortgages approved has dropped this November compared to the same time last year. The number of new loans approved in November 2014 stood at 36,000 with the amount of money being lent at £6billion for property purchases. The figures which have been released by the British Bankers Association show that the implementation of new mortgage rules applied by the Bank of England has had an effect on the market but the new stamp duty changes had yet to filter through and this was likely to reinvigorate buyers again. Buyers will be keen to take advantage of the new stamp duty rules which makes big savings for first time buyers and those looking to purchase a home up to £937,000
Some industry experts feel that the banks and building societies have struggled to come to terms with the new rules set out by the bank of England. The criteria for buyers has been much stricter and many have had to be turned away. It now seems that the tougher lending rules have now had a few months to bed in and the banks are much happier on how to implement the new changes.
It is thought that this will now filter through to more mortgage approvals and will increase the number of new loans in the spring. The new lending rules saw lenders having to go through the outgoings of potential borrowers much more thoroughly and conduct thorough assessments of a borrowers finances. This led to many borrowers being turned down for a loan and dampened down demand for property.
The reduction in the amount of tax paid on stamp duty will boost demand for homes and this is expected to take up any slack that is currently in the system. There is a general election in May which will have a negative impact on the housing market but with interest rates not predicted to start going up until the end of 2015 it is hoped the market will remain buoyant