Photo credits to thelittlehousecompany.co.uk
In the United Kingdom, the numbers of mortgage loan applications that have been approved have been increasing in number for the past two years. This increasing trend started in 2009, when mortgage conditions in the country started to become looser.
According to statistics, the number of purchase approvals in November 2011 was 52,743, significantly higher than that of purchase approvals in October 2011, which had 54, 658. Compared with last year’s approval (November 2010), the percent increase in mortgage loans rose by 15%. Still, according to statistics, borrowers who have a deposit of fifteen percent or less accounted for thirteen percent of all lending in November. This number increased by ten percent in October. For first-time buyers, the average deposit on loans was thirty-one percent, yet this percentage went down to thirty-three in October.
This increase in mortgage loan approvals is believed to be caused primarily by the loosest lending conditions in the country, one that started in October of 2007. This increase in purchase approvals was complemented by investors who “buy-to-let.” These investors take advantage of an increased lender appetite in order to support the “buy-to-let” landlord specifically.
Homeowners who got purchase approvals for homes that are less than or equal to $125,000 pounds increased to 12,791 in the month of November, a significant increase to October’s 11,904. According to Richard Sexton of e.surv (a chartered surveyor), the banks have been focusing their lending activities on specific groups (the buy-to-let groups). Sexton also said that this is the banks’ first time to increase its lending to first-time buyers, and the first time that an increase this notable has happened.