On 27 May the British Bankers? Association (BBA) reported that the level of decline of UK home mortgage approvals is now at its lowest rate in nearly two years, according to a report from The Guardian. At last it seems that the housing market is beginning to stabilise after a period of sharp declines.
The BBA?s announcement revealed that mortgage approvals rose to 27,685 in April ? up from 26,671 in March. This constitutes the lowest annual decline since August 2007 at the beginning of the credit crunch and the BBA see this as a sign that home loans may be beginning to stabilise.
However, analysts are viewing the latest figures with caution and warn that lending conditions remain stringent and that the housing market has a way to go before recovery is imminent. In the meantime, low interest rates are promising and there have been new efforts by the Bank of England to revitalise the economy.
Seema Shah, property economist at Capital Economics said: ?The improvement is from such a low base and the fact that approvals haven?t really increased at all this month is a worrying signal of credit conditions.?
According to BBA figures there was an increase in net mortgage lending of ?2.7 billion, the lowest in eight years, compared with March?s figures of ?3.4 billion pounds rise. Average loan values were ?129,100.
According to recent market surveys there is a regeneration of interest in the housing market from UK prospective buyers together with house prices beginning to fall more slowly. The continuing recession and still rising unemployment mean that banks remain cautious about lending though.
