Mortgage lending down again

As confirmed by this piece in todays Wall Street Journal, mortgage lending in the UK once again fell in March.

Approvals for house purchases fell by 7% from February's figure as total net lending eased to £3.5billion.

For every commentator that indicates that the "green shoots of recovery" can be seen, statistics such as these reinforce the fact that both the housing and mortgage markets continue to be in the doldrums. Whilst one or two lenders have tentatively started offering deals at 80-85% lending there is still a huge problem with undersupply of credit which is strangling any sort of recovery.

An absolutely key figure here is the statistic that approvals for remortgage loans have reduced by 58% year on year. The lifeblood of a mortgage brokers' business has always been the ability to transfer clients from lender to lender at the expiry of their current deal in order to save money and/or borrow additional funds. With thousands of borrowers allowing their loans to revert to their existing lenders' "standard variable rate" (because this represents a good deal now or because the value of their home simply won't allow them to remortgage) this huge sector of the mortgage market is all but closed. Couple this with the fact that house purchase loans fell in March and it is very easy to see why the mortgage advisory market is an extremely difficult place to work in right now.