Latest Expert Witness News

Mortgage approvals hit nine-year low

Gloom about the housing market deepened today as monthly mortgage approvals hit a nine-year low.

The Council of Mortgage Lenders said approvals for new loans to buy a house fell to 50,300 in January, the lowest level for nine years. That total is 1,700 fewer than in December, 25,500 fewer than in January 2007 and more than half the level in the middle of last year.

Those who are applying also face tighter lending criteria with higher deposits and lower offers from mortgage lenders. "The wholesale funding markets remain largely closed and mortgage funding still remains constrained," said the CML's director general Michael Coogan.

First time buyers especially are struggling to get finance. The average loan taken by a first-time buyer dropped from £117,921 to £115,000. That amounts to 88% of purchase price, with that percentage down for the first time in nearly three years. The multiple of earnings for a first time loan has also dropped, from 3.38 to 3.32 times income.

The CML figures followed a gloomy monthly survey of estate agents from the Royal Institution of Chartered Surveyors. In February, it found surveyors were as gloomy about the housing market as they have been since 1990, with the number of unsold houses at near record levels.

Some 64.1% more surveyors reported a fall than a rise in house prices, an increase from 54.7% in January.

A survey for January from the Department for Communities and Local Government also showed house inflation weakening to 8% year-on-year from a revised rate of 8.4% in December.

back