Mortgage approvals reach highest levels of the year
The Bank of England Money & Credit report for August 2015 has been published this week and the data as shown:
- The number of loan approvals for house purchase was 71,030 in August, compared to the average of 65,594 over the previous six months, and up from 69,010 in July
- The number of approvals for remortgaging was 40,931, compared to the average of 35,811 over the previous six months
- The number of approvals for other purposes was 11,685, compared to the average of 10,477 over the previous six months
Adrian Gill, Director of Your Move and Reeds Rains estate agents, comments:
“Mortgage demand has been feeling the wind in its sails over the summer months, and loan approvals in August have cruised past previous monthly benchmarks to reach a 2015 high.
“The mortgage market has certainly cast off the anchor of regulatory changes, and it’s not just first-time buyers who are benefiting from these calmer waters. Remortgaging activity has been making considerable headway recently, as existing homeowners shore up their finances before the wind changes, and secure the best possible deals before an interest rate rise. In the purchase market, buoyant demand is being met with a dried up pool of available homes, and this imbalance will propel property prices on throughout the autumn.”
Peter Rollings, CEO of Marsh & Parsons, comments:
“The mercury in the mortgage market is rising, with August marking the third consecutive month-on-month increase in house purchase loan approvals. And it’s not just new buyers who are feeling confident in the current conditions. Remortgaging has also been a hot ticket over the summer months, as an interest rate rise continues to be postponed into 2016 and homeowners capitalise on cheaper borrowing rates while they can.
“After feeling the chill of taxation changes more severely than other UK regions, house price growth in London is starting to show signs of reawakening, with the capital experiencing the biggest price bump of any region during August. At the highest rung of the property ladder, buyers may still be shying away from the new Stamp Duty banding, but the London property market doesn’t simply revolve around investors or million pound property sales, and in more affordable areas of the capital, demand for homes continues to spiral.”
Richard Sexton, Director of e.surv chartered surveyors, comments:
“Since the General Election, house purchase lending has been growing steadily on a monthly basis – an indication of the building economic confidence and improving household finances widely reported. Sustained wage growth across the board is helping support home movers. Remortgaging is also active as rates remain low, and savvy homeowners consider switching to better deals, before any rate rise. And with a range of financial support schemes in place, the market is positive for those taking steps on to the property ladder.
“Of course, as house prices rise, we need to keep the bottom of the market alive, and this means providing finance to borrowers who can’t afford large deposits. Thankfully, banks are recognising the importance of this and the support is there, helped by the safeguards the MMR changes have brought in. The Help to Buy ISA will boost the bottom of the market further when introduced in December and the gloomy global economic outlook suggests a base rate rise may be unlikely this year, meaning further respite from weightier repayment charges.”