Mortgage activity for both purchase and remortgage business slowed in June, according to the latest National Mortgage Index from Mortgage Advice Bureau (MAB). This comes after activity reached its highest level in 2012 last month.
Using data from more than 500 brokers and 800 estate agents, the National Mortgage Index found the total number of mortgage applications year-to-date is now just 6.9% higher than 2011. Remortgage applications were down 30.5% on May and applications for purchase business were 19.4% lower than the previous month.
Meanwhile, average deposits on purchase applications continued to increase, reaching £66,512 in June from £56,167, an increase of 18.4%. Also,rates have risen again, reaching 4.72% for the average two-year fixed rate mortgage, up from 4.27% in January.
“The June figures are down for the year, having peaked just a month before, and we expect this volatility to continue for the rest of the year,” said Brian Murphy, head of lending at Mortgage Advice Bureau.
“The National Mortgage Index shows average deposits and incomes have been rising and so are average rates. This suggests fewer people are able to secure mortgage finance, especially at the bottom end of the market.
“If we are to see a return to growth we need to see more flexibility and more good quality borrowers getting access to mortgage funding. The impact of moving back into recession has made borrowers nervous and the weather has also played its part, but more needs to be done to help kick-start the property market.
“There is much pent up demand from borrowers, and while we believe the ‘Funding for Lending’ scheme could have a positive impact, it needs lenders to take up the proposal and they will first want to be comfortable there is no stigma attached with doing so.”