The official figures for mortgage approvals for March 2017 have been released, and they are down once again – for the second month running.

The Bank of England released data that showed 66,837 mortgages were approved for purchases in March. This was 1.6% lower than in February. Homeowners who sought out remortgaging loans also saw fewer approvals than had been the case the previous month.

Nearly 1,100 fewer mortgage approvals

The nitty-gritty details reveal that 1,099 fewer mortgage approvals were granted in March compared with the month before. February saw a total of 67,936, while March saw a drop to 66,837. The forecast had been for a milder drop to 67,200.

While the month-on-month drop amounted to 1.6%, the year-on-year drop was more noticeable. This added up to a drop of 4.7%.

“It’s certainly tougher for many people to afford to buy property now,” said Darren Pescod, managing director for The Mortgage Broker Ltd. “House prices are holding steady, while wages have shown little movement. Saving for a sufficient deposit is something many first-time buyers are struggling with, and we’ve seen how the Bank of Mum and Dad has been a popular source of funds for a significant number of people. I think we will see fewer mortgage approvals in the coming months too, as these factors continue to weigh heavily on the market. Even if we do see slight improvements, they are likely to be little more than that.”

Housing prices holding steady

The affordability of housing remains a concern for those looking to buy. This will undoubtedly be a major factor when it comes to saving for a deposit, and seeking an affordable mortgage. While new properties are being built, they are not being built fast enough to satisfy current demand and to bring down housing prices to a more affordable level for those trying to enter the market for the first time.

This means that while house prices are likely to vary, they will not drop by significant amounts. Inflation, and the challenge posed by largely-stagnant wages, will continue to combine to making house purchases more challenging to fund.

Cheaper mortgage rates are helping to keep things moving

“There’s no doubt we’re seeing more buyers in the market at present because there are some great mortgage deals to be had,” Darren Pescod added. “Shopping around does pay off in many cases, and we’ve just seen a record low of 0.89% for a two-year deal from Yorkshire Building Society. That’s the good news – there is a lot of competition in the mortgage market, and that can only be a good thing for prospective buyers.”

Looking ahead, there is a good chance figures for the coming months will remain largely stagnant, or we may see a slight drop once again, as we did in March. We’ll be watching the figures closely to gain a better idea of how the rest of 2017 may pan out. Certain challenges were predicted for 2017, and it looks as though they are coming true.

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