More mortgages available for property investment

One of the major hurdles that needs to be overcome when investing in property is getting the financing in place. This has become increasingly difficult in recent months due to the credit crunch, with banks and building societies appearing reluctant to lend in the wake of the housing market crash. Indeed, some experts have observed that it will be difficult for the housing market to recover until organisations become more willing to lend, as it restricts demand.

However, now it appears the situation is beginning to change. The latest figures from the Bank of England, published on June 29th, revealed that mortgage approvals had risen for the fourth month in a row in May. A total of 43,414 mortgages were granted over the course of the month, up more than 5,000 compared to February, 3,000 on March and 200 on April.

The British Bankers' Association also reported a mortgage increase for May in its report on June 23rd. It recorded 31,162 mortgage approvals at an average value of £133,600 during the 31-day period, a 7.4 per cent increase on April.

Bernard Clarke, the Council of Mortgage Lenders' communications manager, stated that while the figures may not fully indicate that the market is beginning to recover, it could show that the worst is now behind the UK.

"We would like to see that those signs become more firmly entrenched before saying that we think we have reached a turning point in the market. We are possibly past the worst in terms of mortgage business - which looks like it might have been last autumn - but in terms of any sort of recovery there is certainly little sign of strength in that recovery," he remarked.

Mr Clarke said it is possible that the figures could begin to fluctuate in the coming months, rather than increase steadily, as that is a pattern that would be expected under current economic circumstances. He added that because of this possibility, his organisation advises people not to read too much into the statistics of an individual month and rather look at several of them to get a true reflection of what is going on.

"We have always warned about reading too much into one month's figures. You need to look at what's happening over a succession of monthly returns and monthly data to get a clearer picture of trends in the market," he advised.