Mortgage market improves to help out more buyers
BORROWERS are finding it easier to get mortgages now than at any time in almost a year in what industry watchers say is further evidence that the Government's Funding for Lending scheme is bearing fruit.
The latest figures from the Bank of England show that mortgage approvals rose again last month, rising for the fifth month in a row.
Separate figures from the Building Societies Association show that last year mortgage lending by building societies and other mutual lenders grew to a total of £30.7 billion, an increase of 30 per cent increase compared to 2011.
Mutuals also represented a larger share of the overall lending market, taking a 22 per cent market share of total new lending in the year, up from 17 per cent in 2011. In December total lending by mutuals increased to £2.4 billion from £2.1 billion a year earlier.
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Adrian Coles, director general of the Building Societies Association, says that mutual lenders such as building societies are likely to continue to play a prominent role in the mortgage market this year. More than half of the 35 firms which signed up to the Funding for Lending Scheme in December are mutuals.
David Lownds, head of operations at the Hanley Economic Building Society, says: "There are a number of reasons why the building society sector is doing well in the current mortgage market. Firstly, societies are on average offering better rates than banks as reported by Moneyfacts. Secondly they are demonstrating that as a sector that they are open for business and in particular in the first time buyer market. The number of products available requiring a five per cent deposit has increased."
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