First time buyers clinging onto property ladder

30-Jul-2007

The Bank of England has reported that mortgage approvals remained steady last month, confounding expectations that more first time buyers would be forced to curtail their homeowning dreams.

Mortgage approvals totalled 114,000 in June, with most predictions forecasting a fall to below the 110,000 mark.

Total net lending was up from £9.6 billion in May to £10.4 billion, with net lending secured on dwellings rising by £9.6 billion in June – the highest growth rate since March.

"The volume of mortgage approvals may have proved more resilient than expected in June but as recent interest rate increases get fully passed through into borrowing costs, we expect to see more evidence of a cooling in demand for property," commented Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors.

"The Bank of England mortgage data are stronger than expected, but do not significantly alter the overall impression from the latest data and survey evidence that the housing market is gradually losing momentum as higher interest rates start to bite," added Howard Archer of Global Insight.

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