Mortgage approvals down as first time buyers struggle

31-May-2007

The number of UK mortgage approvals has fallen for the third consecutive month as first time buyers find it ever-more difficult to purchase property against a backdrop of rising interest rates, new figures have shown.

The Bank of England's monthly lending figures have revealed that there were 107,000 loans approved for house purchase in April, compared to 111,000 in March and 117,000 in February.

Gross mortgage lending also weakened, dropping by £1 billion to £8.9 billion in April - significantly below the £9.7 billion average exhibited since the turn of the year.

"Housing affordability for first time buyers has been worsened by recent interest rate increases, and the prospect of further rises in coming months is sapping market sentiment," advised Royal Institution of Chartered Surveyors (Rics) senior economist David Stubbs.

"The result is weaker demand, with mortgage approvals now down 16% from their peak in November. Activity in the housing market will continue to decline as the year progresses," Mr Stubbs added.

To find out about those mortgages specifically aimed at first time buyers, see our best buys for first time buyers table.

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