Mortgage applications fall 18% in London but 'pick up' elsewhere

September mortgage activity may have picked up across the UK – despite a huge drop in applications in London, of 18.1%

According to the Mortgage Advice Bureau, new mortgage applications for house purchase were at their highest level since February 2008.

MAB, in conjunction with London brokers Coreco, were reporting as yesterday the CML said August lending was down 8% on July.

But MAB says purchase mortgage applications jumped 14% in September, and remortgage applications rose by 14.3%.

The average loan size fell by 1.3% to £127,591, and 62% of borrowers sought fixed rate products. 

Although housing market activity traditionally picks up in September, purchase mortgage applications were up almost a third (31.2%) on September 2009, says MAB.
 
Brian Murphy, head of lending at MAB, said: “The uplift witnessed in September following the drop-off in August reflects a more normal level of seasonal activity.

“We have seen an increase in mortgage activity in seven of the ten regions in the house purchase arena and in eight out of the ten regions in the remortgage sector in September versus August.
 
“However, with the Coalition Government announcing specific plans to make changes to the provision of child benefit ahead of the widely anticipated Spending Review, albeit for higher rate taxpayers, we are seeing real evidence that disposable incomes are going to come under considerable pressure, and this is likely to put a further brake on borrowers’ ability and appetite to move home.”

The MAB report creates a mixed message, following Halifax, which said house prices and transaction activity plummeted in September. The RICS yesterday said prices fell last month because of low buyer demand, but the National Association of Estate Agents insisted that sales remained steady, although agreeing that demand outweighed supply.