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Who do you believe when a leading bank and an equally reputable building society come out with conflicting information about mortgages on the same day?
High Street bank Santander has reported a mortgage lending slump of £1.5 billion in the first three months of the year – and blamed the shortfall on a lack of demand from customers.
The bank advanced £4.2 billion to mortgage borrowers compared with £5.7 billion in the first three months of 2010.
Mortgage market share for the bank has collapsed from 20% to around 14%.
“The drop is primarily down to a lack of demand. We are still open for business and offering competitive deals,” said a spokesman.
Meanwhile, Skipton Building Society is approving offers to just one in four hopeful borrowers looking for a 95% home mortgage – a figure that the building society agrees is well below normal acceptance levels.
Kris Brewster, responsible for mortgage products at Skipton, agreed that this was due to the lender raising the bar for affordability and credit scores.
Perhaps the real truth behind these statements is Santander has a lack of demand and falling market share because the bank’s mortgages are not as competitive as those offered by their rivals – especially Skipton.
Maybe approvals are more of an issue for Santander – as market share should stay the same in a contracting market.
Whereas Skipton are attracting a huge number of inquiries as their product is one of the few 95% loan to value mortgages on the market.
Their policy seems to be to attract more applications in the search for the best customers, but to accept that many of these will fail underwriting.
Santander also revealed the average first-time buyer has to save for more than three years to put together a deposit for a home – although many more think they will save for more than five years.
One in three (28%) are working overtime or moonlighting on a second job.
Shockingly, 27% expect to take out a loan to fund a deposit on their home.
Phil Cliff, director of Santander Mortgages, said: “Saving for a deposit is not easy, especially in today’s financial climate, and having a clear savings plan can help.”
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