Commenting, RICS Chief Economist Simon Rubinsohn said: “Bank of England mortgage approvals data for January continues to highlight the urgent need for more funds to be injected into mortgage market. Despite three consecutive monthly increases in the RICS ‘buyer enquiries’ series, the actual level of new mortgage approvals continues to languish. The January seasonally adjusted figure of 31,000 was unchanged from the December number and just 4,000 above the November low. Ominously, the non-seasonally adjusted figure hit an all-time low of just 21,000. This disconnect between buyer enquiries and actual mortgages approved highlights the inability of many buyers to access the property market at the present time because of the substantial deposits being sought by lenders.
“Subsequent announcements by both Northern Rock and RBS indicate that a little more funding will flow into the mortgage market over the coming months but as things stand, this will only boost the available finance by in the region of 10% compared with 2008. This demonstrates the need for the government to make speedy progress with its plans to introduce the guarantee scheme for mortgage backed securities as announced in the Pre Budget Report."
