Banks still turning down thousands of mortgage applications

It has been revealed that whilst many reports have claimed that restrictions on mortgage and general lending have started to ease off recently banks are still turning down thousands of mortgage applications every month, further hindering the recovery of the housing market.

The Bank of England released these figures recently, and its data suggested that around sixteen thousand mortgage applications each month were being turned down by banks.

The number of mortgage applications being turned down by banks has increased since the end of last year, according to the Bank of England. In December of last year the number of mortgage applications being turned down came in at around twelve thousand a month.

However, since March of this year this number has increased significantly, and is now standing at around sixteen thousand a month. The figures show that lenders are still exercising stringent regulations when it comes to lending money to mortgage applicants.

One industry official said: ‘It’s much harder for homeowners to be accepted. We’ve seen a complete reversal in the way that mortgage lenders do business. Where before they were looking at reasons why they should grant you a loan, today they are looking at reasons why they shouldn’t.’

The Council of Mortgage Lenders stated: ‘Underneath the headline gross lending figure, it’s likely that a moderate improvement in house purchase lending in May has been offset by very low remortgaging volumes as borrowers stay with existing deals. While recent signs from the housing market have been more encouraging, we do not anticipate a significant recovery in activity in the coming months. Lending volumes appear to have stabilised at extremely low levels, but the weak labour market and lenders’ limited access to funding will constrain activity for some time yet.’