Housing market growth leads to more mortgage approvals

Bank of England figures have revealed that mortgage approvals have reached their highest level in almost two and a half years, with the number approved for house purchase in December increasing to 67,241 from 65,514 a month earlier. The value of mortgage lending meanwhile was up by £4.55bn, compared with an average of £4.2bn over the previous six months.

Whilst the net flow of consumer credit was £1.2 billion in December, compared to £0.7 billion in November.

Commenting on the figures Jonathan Sealey, CEO of Hope Capital, said “The latest figures on lending from the Bank of England reinforce the impression from other data that the property market experienced a strong end to 2019. We’re already seeing this feed through into increased activity this year as well.”

“An end to political uncertainty and the resolution to Brexit seem to be providing a short-term boost. Whether that will last, however, will be down to longer-term factors.

“The Budget in March will be a watershed, where we find out what approach the government will take to ‘levelling up’ regional economies and fostering a sustainable revival in the property market.”

Richard Pike, Phoebus Software Sales and marketing, said “The increase in house purchases is something that the industry has been waiting to see.  Last year the bulk of activity was for first-time buyers and remortgages, so it would be very interesting to see what proportion of the recent house purchase approvals were for first-time buyers against that for home-movers.”

“With the recent Equity Release (ER) Market Monitor (from Key) revealing a drop in the number of ER transactions last year, it appears that the market is shifting in all directions.  Maybe this shift is actually a sign of things coming back into balance?”