Major lenders in the UK expect home loan approvals to stay at their current rate in the coming months, while others predict more foreclosures this year, according to a survey conducted by the Bank of England (BoE).
The bank’s quarterly Trends in Lending Report included recently released figures but sourced little new information. However, the report revealed the bank’s insights on the route the industry is on.
“In recent discussions, the major UK lenders expected approvals for house purchase to remain at current levels over the coming months,” the report noted.
BoE’s most recent data showed mortgage approvals rose slightly to 45,940 in May, only 50 percent of their long-running average.
Since mid-2010, Britain’s residential market has been slipping, driven by buyers’ concerns about their own employment situation, the underperforming general economy, the tightening of credit applications and weaker wages.
The report also revealed that more lenders are expecting more delinquent mortgage repayments and home foreclosures in the coming months, as salaries are stretched.
“Looking forward to the rest of 2011, some major UK lenders noted upside risks to arrears and possessions,” the report said.
Companies who are dependent on consumer spending are likewise at risk, said the report.
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