The number of mortgage approvals is likely to drop and remain constant for the rest of the year, predicted an industry expert.
However, Timothy Lambert, head of consulting at Ducalian, said this was an expected development given the uncertainty that is plaguing the mortgage lending market at present.
He said: "We believed that the rate of mortgage approvals were high for the start of this year and forecast that they would drop and possibly remain static throughout the remainder of 2010."
Mr Lambert emphasised that there was need to keep in mind the different intentions that are driving house purchases at the moment. While some buyers intended to live in the houses purchased by them, a significant percentage of prospective homeowners were simply investing in a property in order to rent it out.
Rising unemployment, job insecurity and people being made redundant were the chief causes of the drop in mortgage approvals, according to Mr Lambert.
His comments follow in the wake of recent statistics made public by the Bank of England which show that the number of loans sanctioned for house purchases had dropped in May, in comparison to the month before.
The total number of loans approved in May dropped to 49,815, down from 49,828 that were recorded in April.
In May, the figure for remortgaging had also slipped to 25,759 which was lower than the average for the last six months, recorded at 26,443.
Earlier this week, Paula John editor of yourmortgage.co.uk, pointed out that homeowners were especially susceptible to fluctuations in mortgage rates in the present economic climate.
She emphasised the even the slightest increase in rate could overwhelm borrowers who were already over-stretched due to pay freezes and job losses.
Ms John added: "There will be some people whose budgets have been severely tightened and stretched, particularly anyone who has been made redundant. For some people an increase in mortgage payments could be the straw that broke the camel's back." |
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