Fri, 30th Aug 2019
House price growth in the UK is subdued, mot mortgage approvals are on the rise, with the latest report showing that approvals for new mortgages had hit a two year high.
Lenders in the UK approved 67,306 mortgages during the month of July, an increase from the 66,506 that were approved in June. This marks the most mortgages approved in a month since the middle of 2017, and is a promising uptick at a time when the political climate is quite unstable. Analysts note that the movement in mortgage approvals is broadly consistent with the slow and gradual movement of house prices over the past few years, in particular since the outcome of the Brexit referendum.
The consumer credit sector has encountered a slowdown, with Amigo loans warning that it did not expect to see its lending books grow this year. The news sent shares in Amigo sliding by more than 50%.
Amigo lends to people with poor credit ratings who are able to find a relative or friend willing to act as a guarantor to ensure that the loan will be repaid. It’s average APR is 49.9%, which is vastly higher than the Bank of England’s base rate of 0.75%.
Regulators are concerned about the bad credit loans market, noting that there has been an increase in the number of guarantors who are being called upon to repay debts. Many guarantors were unaware of what exactly they were agreeing when they signed off on a loan.