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Mortgage Approvals are on the Increase

Thursday, 19th April 2012

Categories: Sales Market Analysis

Author: Peter Barry

With the 1% stamp duty ‘holiday’ for properties with a price tag up to £250,000 having finished at the end of March, there was a healthy rise in mortgage approvals as first-time buyers set about taking the plunge before their buying fees go up once more. But it’s not just first-time buyers who are responsible for more signatures on dotted lines. Despite the continued doom and gloom around the economy, it seems that house buyers are keen to make the most of continued low interest rates. Where uncertainty had previously led people to err on the side of caution, the harsh economic conditions are now so bedded-in that buyers have decided there’s no point waiting around for miracles to happen.

Pennies in the piggybank

With a few years of harsh reality under our belts we’ve learnt to adapt and we’ve also re-learnt the art of saving. Where once banks were willing to dish out 100% (or over 100%) mortgages to anyone who said they could make the repayments, the stringent criteria that were subsequently introduced meant that first-time buyers, in particular, had to go back to the drawing board and stuff a few notes under the mattress every payday in order to have any hope of getting together a reasonable deposit and taking that first tentative step onto the property ladder.

Supply and demand

The news that approvals are on the increase is likely to offer a boost to sellers, as well as buyers. Many sellers wanting to move up to their next property have been left in limbo over the last few years as banks have been reluctant to lend and first-time buyers have been given more hoops to jump through in order to fulfil ever more demanding criteria, particularly with regards to their deposit. Rising demand means rising house prices and more movement across the board, as buyers move into – and up – the chain. First-time buyers are essential in order for the property market to remain buoyant and fast-flowing so this will be good news for anyone looking to buy or sell, as well as those facilitating the sales. Whether or not the trend continues once the stamp duty ‘holiday’ is over remains to be seen. Hopefully, the ball will have been so firmly set in motion that the cogs will continue to turn: first-time buyers will keep buying and the banks will keep lending. 

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