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The number of mortgage approvals for house purchases in the UK has risen to an 18 month high, as the end of summer saw a surge in mortgage lending, according to the latest data from chartered surveyors. There were 69,220 house purchase mortgage approvals in August, some 9.3% higher than the 63,340 approved in August last year, and the highest monthly number since 70,239 in February 2014, the figures from the Mortgage Monitor report from e.surv shows. Compared with July, the number of house purchase approvals has risen 0.7%, from 68,764 approvals. It marks the third consecutive monthly rise in approvals, with mortgage lending steadily improving every month since the General Election in May. The firm says that this improvement also comes despite growing certainty over the likely course of interest rates in the UK, with the Governor of the Bank of England, Mark Carney, reporting that global economic uncertainty, in particular the slowdown in China’s economy, is likely to have little impact on when the bank's Monetary Policy Committee chooses to raise the base rate from 0.5%. 'Weak inflation and recovering wages mean that more British workers are able to meet the stringent affordability requirements demanded by the new MMR rules and obtain the mortgage they want,' said Richard Sexton, a director of e.surv chartered surveyors. 'This latest resurgence of demand is pushing up prices. What’s more, banks are supporting those borrowers that need finance, and many record low rates remain. It‘s a good time for many potential new buyers to get a mortgage and think about taking a first step on the ladder,' he explained. 'Concerns over an interest rate rise may have helped push some borrowers into acting quickly. However, this is now the third consecutive month of growth, and home lending has been strong since May, now that the uncertainty that surrounded the election has evaporated. Healthier mortgage lending reflects a stronger UK economy and an upturn in fortunes for British buyers,' he added. The data also shows that August saw the number of small deposit borrowers, that is those with a deposit worth 15% or less of their properties’ total value, rise in absolute terms to reach a post-recession high. There were 11,975 small deposit house purchase loans approved in August, up 7.5% compared with 11,140 in July and 6.2% up on August 2014. It was the best month for small deposit house purchase lending since April 2008. Small deposit borrowers now represent 17.3% of all house purchase mortgage approvals, the highest proportion since September 2014 and significantly higher than in July 2015, up 16.2% month on month. Sexton pointed out that the latest First Time Buyer Tracker from Your Move and Reeds Rains reported that July saw 29,700 first time buyer sales, the highest number since August 2007. 'First time buyers have… Continue reading →
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