The Bank of England has revealed that mortgages approved for buying homes fell to their lowest levels in nine months, from £6.6 billion in January to £6.3 billion in February.
The figures further show that 47,094 mortgage loans were made for purchasing new property in February. This is well below the average 55,130 of the past six months.
However, more mortgages were approved overall, indicating a significant increase in the number of people remortgaging their property. The Bank has also revealed an increase in the value of unsecured consumer credit, such as credit card loans.
Howard Archer, chief UK and European economist at IHS Global Insight, told the Times that the housing market would remain quiet as consumers struggled to gather funds for deposits and to access credit. He said, “We expect that the housing market will remain relatively muted through 2010 in the face of high unemployment and low wage growth, "
The economy may be recovering yet financial stability seems a distant reality more so in the face of the high unemployment and low growth in wage.
Talk to the financial experts and they will unanimously agree that British consumers would do well to divert their money into debt management rather than savings. This is on the face of the latest figures released by banking giant Santander, which indicate that Britons have saved almost £60 billion in the last year, while monthly cash savings deposits have increased by 34 per cent.
Pierre Williams, an industry expert, felt that it is not the best time to be setting money aside in savings. He commented, “It's certainly a pretty dire time for savers. They have been the sacrificial lambs of the drive to revive the economy with rates slashed to help borrowers. "
According to Santander's research, the average saver is now putting away £219 a month. However, Williams felt that the money could be better used to bolster mortgage repayments. He said, “If you can afford to overpay on your mortgage you can make big long-term savings. "
Industry experts definitely agree with Williams that more than savings its debt management that can help people gain control over their finances. By paying off their mortgage, people can save on the interest and also become debt free. Once they have paid off their debts, they can start with the savings.
So if you find yourself in a situation where you have to pay off your mortgage and you have sufficient disposable income, it is advisable to seek debt advice to understand if you stand to gain by using the disposable income for savings or paying off your debts via either an IVA or other debt solutions suitable according to your financial situation. Debt Management can help you out of a bad debt situation as also show you to plan your finances wisely for the future.