Mortgage approvals nudge up as year ends

Wednesday 1st February 2012

Lending secured on dwellings rose by £0.7bn in December to £13bn, just 0.8% up on the previous year, new figures from the Bank of England show.

The number of loan approvals for house purchase was 53,939, up from 52,628 the previous month.

The number of approvals for remortgaging also nudged up to 32,422 from 31,265 in November.

But Richard Sexton, director of e.surv chartered surveyors, part of the LSL group and which charts the mortgage market, said: “The market has shown remarkable resilience so far, but sterner tests are to come in the following months.

“There are well-founded fears of a serious credit crunch, which could force lenders firmly back within their shells. Banks are already under pressure as funding becomes harder, and this will inevitably feed through into the mortgage market.
 
“With their more cautious approach, banks won’t be in a position to lend more, particularly to first-time buyers. With credit so restricted, and likely to become more so, banks will look to meet their targets by lending more to wealthier buyers and buy-to-let investors.”