The Bank of England has revealed that, in April 2011, the number of mortgages approved fell by 4% to 45,166 – that’s the lowest number for any April since records began in 1992. The number of approved remortgages fell by 10% in April compared to the previous month. Whilst many economists have cited the figure as indicative of a continuation of the depression in the housing market, others have suggested that bank holidays and the royal wedding were major factors.
A spokesman for the Mortgage Advice Bureau said that these events “inevitably skewed the April data” and said it wasn’t surprising to see the reduced figures. He pointed out that there was some recovery in May, but accepted that growth remained low compared with historic trends.
A 6-point plan for a “sustainable and healthy mortgage market” has been produced by the Financial Services Consumer Panel (FSCP). The FSCP has put forward various recommendations for the Financial Services Authority’s Mortgage Market Review. They want regulation that puts consumers first, within a regulatory framework that is sensitive to social and economic implications. They also want the FSA to make it requisite that lenders must assess whether their products are suitable and affordable for individual consumers. In the past, the banks have behaved irresponsibly, and tougher regulation would put a stop to this.
According to the Bank of England, consumer credit rose by 500 million in April. Credit card lending increased by 300 million, whilst other loans and advances increased by 200 million. Nonetheless, consumers are still wary of being burdened with more debt when confidence in the economy is so low.
The Building Society Association said that savings held with mutuals increased by 1.5 billion in April (that’s 600 million more than the increase witnessed in April 2010). In particular, there was a strong increase in deposits into ISAs. This reflects the fact that people are eager to enhance their financial security in what is an uncertain time for many households.
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