Mortgage approvals up 8.1% in August

Figures released by the Bank of England show that the number of new mortgage approvals for home purchases was 107,000 in August, up 8.1% from 99,000 in July.

Compared to a year earlier, mortgage approvals are now 15.1% higher, the first annual increase recorded since June of last year, contrasting with the dramatic fall of 42% last November.

Mortgage approvals in August are now clearly above their long-run historical average of 96,000 per month and have risen by 40.8% since the low point of 76,000 per month in November 2004.

The Bank of England figures confirm that the gradual recovery in housing market activity was strengthened in August.

Household sentiment has held up in the face of both a mild economic slowdown and labour market.

In addition, August’s interest rate cut has boosted confidence in the market.

The renewed interest in the market is now evident, not only through these mortgage approval numbers, but in the number of buyers making enquires as revealed in the RICS housing market survey, which rose for the third consecutive month in August.

RICS expects housing market activity to continue strengthening in the months ahead, helped in part by the August interest rate cut and a solid economic
climate, with indicators such as employment rising a strong 314,000 in the past year and the number of job vacancies still holding at relatively high levels.