Rise in Mortgage Approvals Could Provide Boost for Homeowners
The number of mortgage approvals for residential properties increased in December, according to the latest official figures. This was the first rise in the market since last June and could be a turning point that signals the end of the decline.
The information, which has been released by the Bank of England, highlights that there were 60,275 mortgages approved in the month of December. This was an increase on the 58,956 which were approved throughout November. Before this point there had been a steady decline in the market. This had been partly due to the changes that were made to the mortgage rules, which had made it harder for some buyers to secure loans. Lenders now have to carry out additional checks to ensure that homeowners can afford the repayments.
The latest figures suggest that the mortgage market may have started to adjust to these changes. Borrowers are now understanding how they can meet the new criteria, and lenders have become more proficient at undertaking the checks.
There are other reasons behind the increase in the number of mortgage approvals. With the housing market continuing its period of growth, more buyers are feeling optimistic enough to look at a house move. The Help to Buy scheme has also helped to shore up the market by providing crucial support for those first-time buyers.
The market has been boosted by the changes in stamp duty, which have made some homes a more affordable and realistic prospect. In addition, there has been a rise in the number of loans available at a higher loan-to-value (LTV) rate. This has enabled buyers to get a foot on the property ladder without requiring such a large deposit.
Preparing for Unforeseen Circumstances
Whether you’re planning on taking out a mortgage for a new home or to invest in your current property, such as by installing a balcony from a UK steel fabrication company, you need to ensure that you can afford the repayments if unexpected circumstances were to arise. This could be anything from a long-term illness to losing your job.
Research from the insurer Royal London shows that just over half of those with a mortgage haven’t got a plan for covering the costs if they were ill for over three months. 18% of these haven’t even thought about what they would do. This could put you in a difficult situation if you suddenly lost your income and is a crucial consideration when applying for a mortgage.