A recent High Street Banking report from BBA shows that despite a cooling in the market at the end of 2014, the level of house purchase approvals was 9% higher than the previous year.
According to the December report, there were 499,000 approvals throughout 2014. This is a significant decrease by half since the peak in 2002, but a positive uplift when compared to the 2013 figure which stands at 459,000.
Although many lenders expected a surge in remortgaging and equity release rates, these figures have decreased since 2013. The BBA report states the number of remortgages fell by 6% to 233,000 in 2014, and equity release approvals dropped to its lowest level to 81,000 for the year.
When looking at December figures, house purchase approvals plummeted by nearly a quarter, with remortgaging and equity release dropping by 20% and 32% respectively.
Richard Sexton, director of e.surv Chartered Surveyors, comments: “2014 was a tale of two halves – with strong lending in the first half and a more subdued second. The important thing to remember is that seasonal trends are far from the only ones that affect the mortgage market. The market doesn’t always split itself easily into quarters and halves, so a wide-angle view is required to identify the prevailing trends.
“In the longer term, we can see that purchase mortgage lending was heading for a peak in January 2014. The reasons for the subsequent drop are clear in light of changes to Funding for Lending. In January, the scheme ceased to apply to home purchase mortgages. The changes were implemented because house purchase approvals in the last half of 2013 provoked fears of an overheated market.”
