View more on these topics

Mortgage approvals increase for the first time since last summer

Figures from the Bank of England last week were hailed as the first material improvement in the level of mortgage approvals since the middle of last year.

The figures show the number of house purchase loans approved in February was 37,937. This was up from the 31,791 seen in January as well as the average of 31,495 in the previous six months.

Paul Samter, economist at the Council of Mortgage Lenders, says: “In February the number of approvals for loans for house purchase was nearly a fifth higher than that seen in January.

“This marks the first material improvement in the level of app-rovals since mid-2008.”

Samter says that although this is welcome news he would like to see a few more months’ figures before stating with confidence that market conditions are showing a fundamental improvement.

He adds: “Transactions remain weak and this makes it harder than usual to adjust these figures for the normal upturn that happens in the spring.”

Louise Cuming, head of mortgages at Moneysupermarket.com, says the figures represent good news.

But she warns that the industry should be cautious about the implications for the housing market in the medi-um term.

Cuming says: “Consumers are being enticed onto the property ladder by historically low interest rates and falling house prices.

“But even if prices start to rise again and interest rates creep up there is still a long way to go before we see rates and asking prices similar to two years ago.”

Statistics recently released by Hometrack also provide some grounds for optimism, showing that house prices fell by 0.6% in March – the lowest monthly decline for 10 months.

But the firm’s housing market survey also finds that year-on-year prices are down by 10.3%, with weak demand still having an impact.

Hometrack says that despite the annual fall in house prices, the results of its survey highlight some positives for the market.

For example, the average time a property is left on the market fell from 12 weeks in February to 11.3 weeks in March.

Also, the percentage of asking prices achieved rose to 88.8% in March, compared with 88.3% the previous month.

Richard Donnell, director of research at Hometrack, says: “Market conditions remain extremely tough and the economic outlook is far from rosy.

“Despite this, it’s clear that estate agents are marking down house prices less aggressively than they were in the autumn when the turmoil in the world’s financial markets was at its peak.”

Recommended

No joke

Mole was wondering if Nationwide had considered releasing its House price Index on April 1, but delayed it until April 2, after revealing a 0.9% increase in house prices during March, much to everyone’s surprise. We were pleased to see that this was no April Fool’s joke, though.

Pay Commissions on time

Last week’s lead news item in Mortgage Strategy about angry appointed representatives of Network Data protesting outside the firm’s Botleys Mansion headquarters was a PR disaster for the company.

Thumbnail

Neptune video: Abenomics: the impetus for Japan’s fast-track recovery?

The remarkable performance of the TOPIX over the past year has caused many sceptical equity investors to look again at the Japanese market. These returns have come despite very significant problems facing the Japanese economy. Chris Taylor, manager of the Neptune Japan Opportunities Fund, discusses these problems and whether Abenomics will be able to overcome them, enabling the market to continue to rise.

In the video, Taylor addresses the following:

• The size and speed of Japan’s unprecedented monetary policy
• Abenomics and the implications should it fail
• Corporate Japan and beneficiaries of government policy

Newsletter

News and expert analysis straight to your inbox

Sign up