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Rise in Mortgage Applications at CoOperative Bank
Up 31% - Big rise in mortgage applications at the Co-operative Bank
The Co-operative bank has released figures this week that show an increase of 31% in the number of mortgage applications compared to the same period last year. This may be linked to the introduction of a keenly priced fixed rate product during the traditional spring buying period alongside a reduction in interest rates across other products.
In April the bank reduced its rates by up to 0.25% and in May launched a popular two or five year fixed rate mortgage product that started from 2.95% and offered up to 75% Loan to Value. An attractive incentive has been the £999 arrangement fee combined with a free valuation and conveyancing service.
A spokesperson at the time of the launches said “Our aim is to offer something to suit everyone’s needs, from fee-free options, to capped products and fixed and variable rates.” It would appear from these latest figures that the bank is achieving these goals.
This week Neville Richardson, chief executive of The Co-operative Financial Services has cautiously suggested that there may be an uplift in the public perception of the housing market.
The banking group also claims that there has been comparable growth in the figures within its core banking and insurance services. Whether these figures are indicative of a nationwide change in trends or a reflection of the products on offer remains to be seen.
Other banking institutions are yet to reveal their figures but if similar reports begin to emerge over the coming months then it will no doubt give rise to greater optimism amongst the financial services industry. There has been a great deal of debate about whether the lack of affordable mortgages will, or already has, affected the increase or decrease in house prices. Some analysts claim that by reducing the number of approved applications, imposing greater restrictions and demanding higher deposits mortgage lenders have effectively pushed the market into a position where prices are bound to fall as sellers become desperate to move and reduce their asking price.
The Royal Institute of Chartered Surveyors (RICS) reports that house prices have indeed already begun to fall with the lowest number of potential new buyers since July 2009. This is alongside more homes being put up for sale at lower prices than would previously have been expected.
RICS also added that “buyers are still finding it hard to get a mortgage, while fear of unemployment is putting off others”. A spokesperson for the institute commentated that the figures are “broadly consistent with most other recent data that has been released” and expects that the trend may continue for the rest of the year. It is possible that a more even balance between lending and purchasing is around the corner, but for the moment the jury is still out.
The growth of mortgage applications to the Co-operative Bank during this spring and early summer may indicate a sea-change in public opinion but are just as likely to be a result of good value products being introduced with perfect timing.
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