Mortgages  

Bank of England stats show mortgage market steady

Bank of England stats show mortgage market steady

There were a total of 60,275 loan approvals for house purchase in December, compared to the average of 62,652 over the previous six months, according to the Bank of England’s latest money and credit statistics.

However, December’s figures represented an increase from 58,956 in November and 59,350 in October, prompting commentators to suggest that the mortgage market is beginning to steady.

Richard Sexton, director of E.surv chartered surveyors, stated that compared to the first half of 2014, lending in the second was much more tempered – with around 34,000 fewer house purchase approvals completed.

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He added: “This was a side-effect of regulatory changes which were needed to make the market much healthier – immunising it against future ailments – now the market is ship-shape and ready to move forwards.

“The stamp duty reforms have recharged goodwill in the market in the last month, as well as taking some of the pressure off borrowers building a deposit. With inflation low and interest rates remaining unchanged, mortgage rates are at an all-time low.

“This potent cocktail of cheap rates and stamp duty relief have helped push lending along in the run up to the general election.”

Adrian Gill, director of Your Move and Reeds Rains estate agents, agreed that the introduction of more restrictive mortgage regulation took the breath out of lending for a while, but as the market adjusted this stranglehold loosened.

“There was an encouraging December uptick in mortgage approvals, as borrowing is once more starting to build up speed.”

The number of approvals for remortgaging was 32,912 in December, compared to the average of 31,924 over the previous six months. Approvals for other purposes totalled 9,723, compared to the average of 9,780 over the previous six months.

December’s Help to Buy Scheme statistics showed that during the first 21 months 41,533 properties were bought with the support of the equity loan scheme. The majority of sales were to first-time buyers (34,419), representing 83 per cent of total sales, with an average purchase price was £212,128.

Mr Gill added that the scheme is leaving the biggest imprint on places outside of London and the South East, where property prices are still lower and growth is yet to seriously hit the ground running.

“With the combined support of Help to Buy, higher LTV lending, low mortgage rates and reduced stamp duty costs, the path was clear for many smart first-time buyers to make tracks and find fantastic deals on homes.”

peter.walker@ft.com