Mortgage update from the Mortgage Advice Bureau as demand for mortgages increases in the UK

by James Powell

Mortgage update from the Mortgage Advice Bureau as demand for mortgages increases in the UK

There has been a surge in demand for mortgages in the UK, according to data from a Bank of England survey.

Numbers rose at the fastest rate in six years in the final quarter of 2013, after being boosted by the government's Help to Buy scheme.

Responding to the Bank of England's quarterly Credit Conditions survey, lenders reported a \"significant\" 62% rise in demand for mortgages - the highest figure since 2007 - in the final three months of last year.

Banks and building societies told the central bank that demand was \"supported by first-time buyer and homemover interest in the Government's Help to Buy scheme\".

The expansion of mortgage availability generally was due to lenders' increased appetites for risk, rising house prices and banks and building societies looking to meet their market share objectives.

The return of lenders’ risk appetites led to them relaxing their credit scoring criteria and the proportion of loans being approved rose also significantly, the Bank's report said.

Lenders also said that they expect mortgage availability to \"significantly increase\" in the first quarter of 2014, including deals for borrowers with deposits below 10%.

An unexpected response in the survey was that lenders did not expect to see a further increase in mortgage demand in the first three months of this year.

But Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said that he did expect to see an increased demand among consumers, arguing that the rise in house prices over the past year had been \"healthy\" and that a willingness of banks to lend to those with low deposits was \"especially important\" to allow people to get on the property ladder in the face of rising prices.

Source http://www.mortgageadvicebureau.com/news/demand-for-mortgages-increases-in-the-uk/763/

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