Lending figures reveal first time buyer difficulties

28-Aug-2007

The British Bankers' Association (BBA) has revealed that the number of mortgages approved in August fell by one per cent year-on-year in July, illustrating how first time buyers continue to struggle to get onto the housing ladder.

While the BBA added that gross mortgage lending rose by 12 per cent compared with figures from one year ago, this was largely on the back of a greater level of remortgaging activity, the organisation suggested.

But while the lower approvals were largely a seasonal trend, according to the BBA, the Royal Institution of Chartered Surveyors (Rics) warned of more problems ahead.

"Lower approvals volumes simply reflected the seasonal pattern, so we expect the stable trend in the banks' lending to continue over the next couple of months," commented David Dooks, BBA director of statistics.

"Tightening borrowing standards in response to sub-prime concerns could intensify the current slowdown in lending activity over the next six months," commented Rics senior economist Oliver Gilmartin.

"Equally, those trying to get a foot hold on the property ladder may need to stump up higher deposits to allay the fears of lenders," Mr Gilmartin added.

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