Mortgage approvals continue to climb
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The number of house purchase approvals rose in November to 60,518, figures from the Bank of England show.
House purchase loans in November were at their highest level since March 2008, and up from 57,718 in October.
Remortgage approvals totalled 24,897, which was slightly higher than the 24,513 approvals in October but below the average 29,069approvals over the previous six months.
Total net lending to individuals rose by £1.1bn in November, up 0.7% from the same time in 2008.
Within the total net lending secured on dwellings increased by £1.5bn, higher than the October increase of £1.1bn and the previous six-month average of £700m.
The twelve-month growth rate was 0.9%, unchanged from a revised 0.9% for October.
Brian Murphy, head of lending at Mortgage Advice Bureau, says: “The borrowers who are driving this surge in mortgage approval figures are people with decent deposits and good credit histories.
“Without a deposit and a good credit score, you’re still on a wing and a prayer.”
He adds: “The negligible rise in remortgages is further proof that people are banking on a benign interest rate environment during 2010.”
Andrew Pilkington, economist at the Centre for Economics and Business Research, says: “Today’s better than expected rise in mortgage approvals continues the relatively gentle but sustained recovery in mortgage finance.
“But the monthly level of mortgage approvals remains far below pre-credit crunch levels while bank and consumer caution remains evident as unsecured lending continues to fall back.”
Secured lending by banks excluding the effects of securitisations grew by £4.3bn, more than both the October increase of £3.3bn and the previous six-month average of £2.8bn.
But consumer credit did not echo the trends in mortgage lending.
Consumer credit fell by a net £400m, below the previous six-month average of a £200m fall.
Credit card lending increased by £200m but other loans and advances fell by £600m.
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Readers' comments (1)
Michael White CEO Emailmortgages | 4 Jan 2010 1:26 pm
Positive steps for the market have been few and far between and the Government could have maintained its helping hand for the mortgage and housing market with a continuation of the stamp duty holiday and an extension of the 15% VAT rate. Neither was forthcoming which means more money must be found by prospective purchasers – and I thought I heard Alistair Darling describe the UK housing/mortgage market as much more important to the UK than in other European countries? If this is truly the case there more should have been done to continue this support.
An increase in Base Rate should signal a kick-start to the remortgage market. Lenders will raise SVRs and borrowers who have been able to sit back and do nothing will undoubtedly feel that rates can only go one way (albeit slowly) and they should again start looking for a special rate. We should at this point be moving to a rather more normal and healthy lending environment as well. At present those lenders with money to lend are making hay while the sun shines; as the only show in town they are charging considerable margins and using the lack of competition as a means to boost lagging balance sheets.
All in all, at best we should all hope for a quick 2010 exit from recession, some increased lender competition in the marketplace and (hopefully) a commitment to offer intermediaries access to the better-priced products in the range as opposed to pushing them down the direct channel!
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