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The recent string of bank holidays, along with the royal wedding, have led to mortgage activity slipping slightly over the month of April – apparently distracting people from remortgaging or moving.

According to figures released today, mortgages approved for house purchase fell by 4% over April to 45,166, the biggest drop since December, when the fall was blamed on the bad weather countrywide. Remortgage deals approvals fell by 10% to similar levels of July 2010, which saw some 28,091 loan applications, it has been suggested that this was due to a reprieve from a hike in interest rates. Net lending recovered slightly in comparison with March, but was still only at £739million, a massive fall from before the credit crunch hit, which was more than £9billion a month.

The Council of Mortgage Lenders and the BBA both reported a similar picture, showing a drop-off in activity throughout April. Total mortgage advances fell by 14%, and there was a slide in remortgage approvals of 12%. Although data does suggest that there have been a slump in the mortgage market, it is, as yet, unclear whether this is simply related to the bank holiday weekends that came in quick succession, or whether – more gloomily – it is the beginnings of another downturn in the economy.

Chief UK and European economist with IHS Global Insight, Howard Archer, stated that the relapse in mortgage approvals ‘reinforces our belief that modest falls in house prices are more probable than not over the coming months.’ However, Brian Murphy, head of lending at the Mortgage Advice Bureau, has a different take on the figures, saying that the bank holidays would lead to inaccurate data, and that it was really no surprise to learn that there had been a decline in loan approvals. ‘During May,’ He said, ‘activity bounced back and returned to the steady growth trajectory of February and March, albeit one that is naturally still at historically low levels.’

Current conditions are still shaky for banks and building societies, which have seen the net mortgage lending contract for the twenty-eight month in a row, and customers are in the black to the tune of £462million in repayments, over advances for new debtors. There is, however, a sliver of light on the horizon in the form of the savings market; the amount of money held by mutuals grew by £983million in April.

For more information on the remortgage process speak to us at www.remortgage.com on 0800 144 4992.

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