House purchase mortgage applications plummet 21% in a month

Mortgage applications for house purchase were down an astonishing 20.9% in April, compared with March.

Remortgage applications also plummeted, down by 26.7%.

Despite the steep monthly falls, figures for house purchase loan applications were back to where they were a year ago, showing that the mortgage and housing markets have really been a case of one step forward, one step back.

According to the latest National Mortgage Index compiled by independent mortgage brokers Mortgage Advice Bureau and Coreco Group, mortgage applications in April were just 0.1% down on April 2010.

The average loan size on mortgage applications in April was £124,328 compared to £127,546 in March, a decrease of 2.5%.


Remortgage applications fell for the second consecutive month in April. But despite their hefty monthly drop, were still up 19.5% on applications made in April 2010.

Brian Murphy of MAB said mortgage activity had been affected by April’s string of bank holidays.

Andrew Montlake, director of London-based independent mortgage broker Coreco Group, said: “The worry for the property market as a whole is that if house prices remain high due to lack of good-quality housing stock, and mortgage lending continues to be difficult for those looking at higher loan-to-values, first-time buyers will remain a rare breed, and first-time buyers are going to be crucial for any longer-term recovery.”

He said there was little light at the end of the tunnel for first-time buyers, with only a smattering of 90% LTV mortgages available.