Increase in mortgage lending 'should be greeted with caution'

Date:Friday 26th June 2009
Author: Max Freedman

Increases in the number of mortgage approvals last month recorded by the British Bankers' Association should be greeted with caution, an expert has said.

According to the association, 7.4 per cent more home loans were approved over the 31-day period compared with the previous month.

Responding to the figures, Peter Cowell, broker at Click n go Mortgages, said although the rise is positive, it is still "very early days".

He added: "Everyone is wanting and hoping for a strong recovery, but it will be a very slow and steady process. The increased awareness of shared-ownership and shared equity purchases is definitely helping those figures as well. It is very early days."

Mr Cowell went on to state that lenders in the UK are waiting for increases in the "confidence factor" of house prices and for their arrears books to reduce in size before they begin offering more attractive home loans.