Mortgage approvals are down but mortgage arrears and repossessions increase

Although that there seems to be activity in the market place with new buyers, the banks are being very cautious on who they lend money to. Most if not all lenders are now requesting large deposits from borrowers, giving the banks more security. The biggest problem that this makes is that first time buyers are finding it hard to get on the first run of the property ladder. This has a major knock on effect through out the entire market, because first time buyers are the ones who enable people who are looking to sell and buy a bigger/smaller property, or need to sell to stop repossession of their home, can’t.

The number of new mortgages being approved has fallen again, for example in April of this year it was recorded that there was nearly a 60% decrease from may of last year, and there are no signs of the banks increasing the number of new mortgages that they are approving. We think that this is because the banks are still unsure as to what the property market is doing and plus the fact that the number of people who are going into mortgage arrears is on the increase. The amount of people try to stop repossession of their homes are reaching phenomenal levels, and the banks are taking big losses on properties, in order to sell them. All of this means that any money that the banks have, they are keeping to one side, and not lending it to each other so they can cover their bad debt.

There is no sign of a ‘slow down’ in the amount of the people facing repossession or trying to stop repossession. This is due to the fact that employment levels is at an incredible low, and also the number of people being made redundant, employers are having to make cut backs to try and survive in the credit crunch. This is why the number of people of people in mortgage arrears and trying to stop repossession keeps increasing.