Remortgage Approvals Decline in September
More data has been released that backs up the assumption that the UK housing market is calming down. The excitement that was seen a few months ago is abating as it is thought sellers are bypassing the higher prices being seen on properties. According to the British Bankers’ Association (BBA) the mortgage activity level fell in September in comparison to the level seen last year by 10%.
Housing prices are stalling just as mortgage lending is slowing. The data from the BBA it backs up the data from several house price indexes.
In September there were 39,721 approvals for house purchases.
Some of the slowdown is being credited to the new Mortgage Market Review guidelines that were put into place in April. There are now requirements for lenders to assure responsible borrowing by confirming through information from the borrower that the loan is affordable. Borrowers must share more intimate information with the lender about their saving and spending habits. The lender must determine if the loan is affordable and must also put the borrower’s information through a stress test to make sure the loan is affordable even if interest rates increase.
Richard Woolhouse, BBA chief economist, “A year ago there were many of us who were concerned by the heady pace of property price rises.
“These figures suggest we are now experiencing a steadier housing market and that's no bad thing.”
Homeowners have been remortgaging at a lower level with a fall of 24% in approvals in September compared to the same month last year.