The recent increased levels of interest in the housing market seem to be continuing their upward trend at the moment, as the seasonally adjusted figures for new loans for house purchase have shown another increase in the total number of homeowner loans being approved through the months of both March and April this year.

March saw a total of 26,671 new homeowner loans, with another 27,685 new loans in April, against a six month average figure of just 23,812. Low interest rates on loans and more affordable house prices finally seem to be starting to encourage people back into the housing market.

However, the same cannot be said for the remortgage market. The total number of remortgage loans fell in April to 44,827, from 47,536 in March and a six month average figure of 55,517. This not only reflects the current low level of interest rates on loans, but also the large margins which banks and building societies are currently applying to their homeowner loan products. Borrowers who are coming to the end of their initial deal with their current lender are invariably better off by remaining on their existing lenders standard variable rate, rather than switching to a new loan provider.

David Dooks of the British Banking Association (BBA) said “The house purchase part of the mortgage market appears to have stabilised, with slightly more approvals coming through, although April’s weak mortgage lending reflects the lower number of approvals in previous months.

Household’s uncertain financial circumstances not surprisingly continue to dictate consumer behaviour, both in the housing market and in generating only low demand for new personal loans. Company borrowing also reflects the economic backdrop, with most non-financial sectors seeing net repayments, although short term finance for other financial companies unwound in the month, suggesting that their financing needs may be easing.”