Mortgage approvals reach ‘record low’ in May

The number of mortgage approvals for house purchases reached a record low last month, according to an industry body.

Figures for May show that remortgaging levels held up, accounting for a record 53 per cent of all mortgages approved, reported the British Bankers’ Association (BBA).

It also found that consumers spent more on their credit cards last month but repayment levels on credit cards were lower.

BBA statistics director David Dooks suggested mortgage activity was lower in May as a result of tighter lending criteria and economic pressures on households.

He added: “Only remortgaging business is holding up, where people need or want to take advantage of deals with other lenders.”

Separate research released last week by the housing charity Shelter suggests that more than four million households used credit cards to help meet rent or mortgage costs in the past 12 months.

It also found that over two million households are spending in excess of half their income on rent or mortgage payments.

Tags: BBA, economic pressures, number, lending, repayment, mortgage payments, finance, result

Support for bank switching within EU

Banks in the UK have given their support to plans which would see customers able to move freely between banks within the European Union.

However, despite supporting the idea of allowing people to switch banks, concern has been raised about the way in which it is done.

Proposals have been put forward which would mean people have a single bank account number which they keep for life and can move to different banks.

Angela Knight, chief executive of the British Bankers’ Association (BBA) says that this would not be ideal and said that the BBA supports mobility but not portability.

“UK banks support EU initiatives to give customers greater choice and freedom. I believe the UK already leads the way in helping people move from bank to bank. We have a model here which would help cut out unnecessary red tape and give customers a fast, safe and effective way to move their account,” said Ms Knight.

“Proposals for one single account number from cradle to grave across the whole of the EU won’t work and could lead to less customer choice. Every country has its own way of doing things which would make it a nightmare to dovetail systems across all member states.

“It also fails to take into account the way people want to bank – for example having one account for the bills and another for saving,” she added.

Ms Knight said that she believes the current UK system of switching banks leads the way across Europe.

Tags: single bank account, customer choice, ideal, cradle, member states, finance, BBA, banks in the uk