Mortgage approvals soar in December

A 12-page statistical release on money and credit proved that mortgage approvals rose in December to 71,738, compared to the monthly average of 65,001 across the rest of the year.

In total, 734,969 home loans were approved in 2013, up from 612,654 the previous year.

Andy Knee, chief executive of conveyancing firm LMS, noted that the figure had breached the 700,000 barrier for the first time “in a number of years”.

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He said: “Despite the Christmas chaos, savvy households took heed of the range of attractive and alluring deals on offer.”

The figures also showed the number of approvals for remortgaging kept steady at 34,754 in December, consistent with the average monthly increase over the previous six months.

Peter Williams, executive director of the Intermediary Mortgage Lenders’ Association, said the figures offered “every reason” to be upbeat about mortgage prospects in 2014.

He added: “The Bank’s figures provide confidence that the mortgage market is strengthening but its long-term health rests on how and when government support will be withdrawn, and what the market will look like when this happens.”

The figures have also driven speculation about when Mark Carney, governor of the Bank of England, will raise interest rates, as his widely publicised policy of ‘forward guidance’ has been undermined by falling unemployment.

David Copland, director of mortgages for LSL Property Services, said the property market was being rapidly restored to its pre-recession health earlier than anticipated.

He added: “If interest rates do not rise this year, I expect rates to start increasing in quarter four post general election.”

Adviser view

Brian Murphy, head of lending for Mortgage Advice Bureau, said: “Close supervision from the Bank of England should provide measured growth and ensures those with low deposits are not priced out of a flourishing housing market.”