Mortgage approvals still slow

According to figures mortgage approvals in the UK for the start of this year have been sluggish despite optimism over improvements in the market. The Bank of England released data showing that the level of mortgage approvals in March did increase slightly from the previous month rising from 46,882 to 48,901.

The figure for mortgage approvals in March was also said to be 17 percent higher than the figure in March of last year, so there have been some signs of improvement. However, the bigger picture indicates that mortgage approvals remain sluggish for the first part of the year.

Apart from 2009 the number of mortgage approvals for the first quarter of this year was at its lowest on record according to the figures. One economist said that the Bank of England figures showed that the mortgage market and housing sector were finding it difficult to gain momentum following the turbulence of the last couple of years.

He added that over the coming months property prices in the UK were likely to be erratic, and for the remainder of the year it was most likely that property prices would be flat. The Building Societies Association added that the mortgage market remained fragile and was likely to remain so in the short term.

The group said that some of the factors that could contribute to this fragility included the uncertainty over leadership of the country, jobs, interest rates, and inflation on property prices.

One financial expert concluded: “It is good news for borrows that lenders are slowly acclimatising to a new landscape of the mortgage market and continue to improve on the competitiveness of new mortgage deals. But lending figures show that there is only a slight improvement in the market; we still have a way to go before the market returns to any sort of normality.”

Tags: finance, slight improvement, new landscape, Banking, month, mortgage, societies

Building societies still lending despite the credit crunch

Building societies are still in a good position to offer funds for mortgages despite some announcing they were restricting lending, one financial expert has claimed.

According to the Building Societies Association (BSA), action taken last week by certain building societies was not an indication that these providers were struggling in the wake of the credit crunch.

With certain larger lenders withdrawing from the marketplace, many smaller firms were inundated with applicants which required a re-adjustment of service levels to ensure customers were still dealt with, said the firm.

Neil Johnson, PR and policy manager for the BSA, said: “Building societies are largely funded by retail deposits rather than wholesale markets. So the problems in the wholesale markets haven’t affected them in the same way that they’ve affected banks.”

Earlier this month, the BBC reported that five building societies – the Bath, the Earl Shilton, the Newbury, Melton Mowbray and the Tipton & Coseley – had restricted or halted new mortgage lending due to an influx of new customers.

Tags: societies, month, bank of england, business, good position, Social economy, economics, Financial services

Building societies ‘offer best value’

Building societies are offering a better standard of service in most areas than banks, according to new research.

As well as providing higher service standards, the study also claims that building societies’ mortgages and savings, on average, represent better value than those offered by banks.

The research has been carried out independently for the Building Societies Association (BSA), a trade body which represents all of the UK’s 59 building societies.

Speaking at the Association’s annual lunch last Thursday, BSA chairman Iain Cornish said: “Building society savers and borrowers are significantly more satisfied with the services which they receive from building societies, than are customers of banks.

“The whole building society model is more transparent, simpler, more prudent and more trusted and we simply do not have the same motivation as banks to take massive risk positions in pursuit of profits for shareholders.”

Pointing to two recent reports published by a price comparison site, Mr Cornish claimed that building societies offered 70 per cent of the UK’s best value mortgages and 70 per cent of the best-paying savings products in the last 18 months.

Mr Cornish is also chief executive of the Yorkshire Building Society.

Tags: Yorkshire Building Society, Mr Cornish, Iain Cornish, standard, Trustee Savings Bank, building, societies, new research

Banks must keep customer more informed states BBA

The British Banker’s Association has recently stated that UK banks need to do more to keep their customers informed on all levels when it comes to the services and product that they offer, as well as when it comes to any changes.

A senior official from the British Bankers’ Association stated that banks need to buck up their ideas in terms of keeping customers informed. This comes at a time when reports indicate that consumer confidence in the banking and financial sectors has plummeted.

 According to the Chief Executive of the British Bankers’ Association, Angela Knight, banks in the UK need to keep their customers far more informed in terms of banking issues. Ms Knight stated that the increasing complexity of the banking industry as a whole meant that banks needed to be far more informative with their customers. She said that banks needed to be more open and informative in terms of their procedures, and that better explanations and increased security was required from banks.

Although one recent report is said to have shown that many consumers are satisfied with their bank, another study has shown that the confidence of consumers in banks and building societies, as well as other areas of the finance sector, has taken a real hit as the result of chaos and turmoil in the money markets and the recent problems seen at Northern Rock, where many savers were in fear of losing their money resulting in the mass withdrawal of over £2 billion.

Another issue that has affected consumer confidence and satisfaction when it comes to banks is the recent controversy over bank charges, which is due to come to a head early next year when the Office of Fair Trading takes the banks to court in a test case to determine what can be construed as a fair fee.

Tom Smith
4th November 2007

Tags: deposits, funds, consumers, bank, information, Banking