RICS responds to BoE mortgage figures

The Royal Institution of Chartered Surveyors has responded to the Bank of England’s mortgage figures for September 2005.

David Stubbs, economist for RICS, says: “Figures released by the Bank of England October 31 2005 show that the number of new mortgage approvals for home purchases were a seasonally adjusted 107,000 in September, up less than1% from 106,000 in August.

“Compared to last year, mortgage approvals are now 24.4% higher, contrasted with the dramatic fall of 42% last November. Mortgage approvals in August are now above their average over the last decade of 99,000 per month and have risen by 40.8% since the low point of 76,000 in November of last year.

“The Bank of England figures confirm that a gradual recovery in housing market activity was maintained in September. Household confidence has held up in the face of a mild economic slowdown, thanks in part to August’s interest rate cut, which 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 new buyers enquires, which rose for the fourth consecutive month in September.

“In addition, transactions recorded by the Land Registry have picked up sharply in recent months. However, the small size of the increase in mortgage approvals from last month could signal that the rise in activity precipitated by the interest rate cut may be close to peaking.

“Housing market activity, as measured by mortgage approvals, is expected to continue at this above average level in the months ahead and may even continue to increase slowly, helped by August’s interest rate cut, and a benign economic climate.”