House mortgage market stays subdued
The UK mortgage market remains subdued despite a slight recovery in April, the major banks say.
The British Bankers’ Association (BBA) figures show 38,704 new mortgages were approved for house purchases in the UK in April, up from 35,546 in March.
But this is still down 39.4% compared with the same time a year ago.
The figures show a sharp rise in the number of people remortgaging, highlighting a trend of homeowners switching lenders for a better deal.
Still moving
“It is clear that, contrary to some reports, the mainstream mortgage market has not ground to a halt,” said the BBA’s statistics director David Dooks.
The mainstream mortgage market has not ground to a halt
David Dooks, BBA
The figures only cover the major banks, who have been able to ride the credit squeeze and have continued to offer a wider range of mortgage deals than smaller lenders.
The smaller banks and building societies have been putting deals on hold or withdrawn offers as lending between financial institutions remains tight.
The rise in remortgaging levels - up from 60,410 in March to 74,722 in April - could also be the effect of Northern Rock customers being encouraged to switch lenders for more competitive deals.
Credit rating explained
No-one has an automatic right to credit.
Individual lenders use their own criteria when deciding whether or not to lend you money, but they rely heavily on data supplied by credit reference agencies.
BBC News explains how they work, the information they hold, and how you can check and challenge your credit file.
What is a credit reference agency?
Credit reference agencies are commercial companies which compile information from a number of different sources, including the electoral roll, county court judgements and financial institutions.
They sell this information to lenders and other service providers in the form of credit reports which help them to decide whether to grant an application for a loan, credit card, or provide another financial product.
The three credit reference agencies operating in the UK are Experian, Equifax and Call Credit.
What information do they have?
Agencies hold personal information taken from previous credit applications. This includes your name, date of birth, current and recent addresses.
DATA HELD BY THE AGENCIES
Name and date of birth
The electoral register
Credit payment history
County Court judgements
Bankruptcy and administration orders
House repossessions
The main part of your credit report is your credit history. This lists your credit accounts, the date they were opened, the credit limit or loan amount, and whether you have missed any payments.