Mortgage Approvals At 18-Month High
Figures from the Bank of England reveal, while, the numbers for borrowers looking to remortgage their properties continued to decline, the number of mortgages approved for making a house purchase climbed to an 18-month high in September.
Up from 52,970 in August and above the previous six-month average of 48,221, a total of 56,215-house purchase loans were given approval during the month.
Homebuyer numbers were more than double of last November's low, during the period when the housing market was in the doldrums, remaining historically low, even though it reached its highest level since March last year.
On the other hand, in the 12-months to September, remortgaging activity dropped 64%, with remortgage approvals from last September's 72,000 falling to 25,528.
A tightening of the lending criteria, including sharp cuts in the Bank of England base rate, has driven activity down, making it far cheaper for borrowers to remain on their lender's standard variable rate, rather than switching at the end of a special deal.
Despite, total number of mortgages approved during the month being higher than August's figure at 109,700 taking remortgages, house purchases and other loans secured against property taken into account, the lending rate value dropped to £11.7-billion from £12-billion.
Total net lending secured on properties also fellfrom £1.28-billion in August to £922-million, though it managed to remain above the previous 6-month average of £600-million.
The value of unsecured consumer credit fell by £0.3-billion over the month i. e. money borrowed through loans, credit cards, overdrafts and other credit agreements, as consumers continued to pay the debt, making this the third month running, net lending figures have been negative.
The pick-up in house purchase lending, according to Howard Archer, chief UK economist at IHS Global Insight, has been driven by low interest rates and falling house prices that made homes more affordable.
Analysts said positive mortgage figures should not be viewed as the housing market being out of the woods.
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