Mortgage approvals at a six-month high: BoE

Mortgage approvals at a six-month high: BoE

Mortgage approvals in February 2015 rose to 61,760 compared with 60,707 in January, according to the Bank of England.

The number of approvals in February was higher than the average of 60,750 over the previous six months.

The number of loans approved for remortgages increased from 31,561 in January to 32,099 in February.

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Mortgage lending is still below its peak of early 2014, before the introduction of the mortgage market review, which included the adoption of stricter lending criteria among mortage lenders, partly due to curbs by regulators in 2014 intended to cool the market.

The Bank of England’s 31-page report showed that total lending to individuals increased by £2.5bn, up from an increase of £2.4bn January 2015. Net consumer credit, including personal loans, overdrafts and credit card lending, increased ¤740m, compared to ¤802m in January.

Meanwhile, the M4 Money Supply – money in circulation excluding banks – fell 0.2 per cent in February, in line with expectations and following a decline of 0.7 per cent in January (figures are seasonally adjusted).

Adviser view:

Brian Murphy, head of lending at London-based Mortgage Advice Bureau said a combination of low inflation, moderate house price growth and a delay in a base-rate rise seemed to be working in consumers’ favour.

He said: “Data from the Bank of England shows that momentum is returning to the mortgage market, with loan approvals for house purchases steadily climbing from month to month.

“Homebuyers are showing no signs of being dissuaded by uncertainty surrounding the election, and are taking advantage of market conditions that are ripe for borrowing at affordable rates.”

Lending secured on property

Total Value (£bn) House purchase Remortgaging
2014 Nov15.39.65.2
2015 Jan16.0 10.75.1
Feb 16.110.2 5.3
Source: BoE