Categorized | International

Mortgage Approvals Drop in the United Kingdom

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As many economists around the world suspected, the number of mortgage applications in the United Kingdom during the month of February took a significant hit. The number of mortgage approvals fell by more than twenty percent during the month of February.

 

Economists believe that the massive decline in mortgage approvals is largely due to the reduction in the number of actual applications. Many first time homebuyers had rushed to beat the stamp duty deadline at the end of January. As such, there were an inflated number of mortgage approvals during the months of December and January. It is for that reason that the corrective decline that took place in the United Kingdom during the month of February does not come as a surprise to most.

 

While the massive decline in loan approvals is certainly disconcerting for economists and officials in the United Kingdom, much of the worry is due in part to declines in other areas of the market.

 

For example, the average loan to value fell yet again for the third straight month. In addition, the number of loans to borrows with small deposits dropped substantially during the month of February.

 

With many first time homebuyers declining since the deadline of the stamp duty, economists now believe that the residential real estate market in the United Kingdom may be facing a more tumultuous year than originally thought. The artificial boost of first time buyers excited many of those in the real estate sector, though the most recent declines have quickly brought everybody back to reality.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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