Thousands of mortgage applications turned down

New data from the Bank of England has revealed around 15,800 mortgage applications were turned down in May.

The report in lending found there were 67,000 mortgage applications for home purchases in May, but 23.55 per cent were turned down.

However, since the start of the year acceptance rates have risen from a low in January when three out of ten applications were turned down.

The number of applications from people wanting to buy is also up, as estate agents report greater interest from buyers – although there is a lack of supply of good properties coming onto the market.

The number of mortgage applications for house purchase is up 45.6 per cent since December.

The Bank of England report confirmed data from the Council of Mortgage Lenders (CML) yesterday, that while more interest is coming from buyers, homeowners are remortgaging less.

The Bank put the fall in remortgage lending down to borrowers being happy to fall onto low standard variable rate (SVR) mortgages at the end of fixed deals.

Also falling house prices are eating away at homeowners' equity, meaning they are unable to qualify for more competitive mortgage deals requiring lower loan-to-value levels.

The report also notes a "significant tightening in availability" for credit cards along with weak personal loan lending as lenders see greater risks of defaults on loans.