Mortgage approvals hit 5-year high

U.K. mortgage approvals rose to 60,624 in July - the highest number in over five years - it was revealed today in Bank of England figures.

Related topics:  Mortgages
Amy Loddington
30th August 2013
Mortgages

Richard Sexton, director of e.surv chartered surveyors, commented:

“The housing market is being lifted by a rising tide of mortgage lending. House purchase lending is 30% higher than last July, which reflects the drastic improvement in the availability of high LTV mortgages over the past year. The mortgage market is now much more accessible to first-time buyers, which has triggered a ripple of activity all the way up the housing ladder. The choice of mortgages available to borrowers is at its highest since the financial crisis, which has opened up the market to a much wider spectrum of people. But there are concerns the improvement is artificial and unsustainable in the long-term.

"Help to Buy and Funding for Lending have given the market a shot of adrenalin, which has disguised underlying problems like a chronic lack of house building, but they can’t continue indefinitely. A critical shortfall in house building threatens to inflate a house price bubble, which is why the government must make building homes a priority. And consumer finances are still sweltering under the heat of high inflation and weak wage growth, which makes high LTV lending a riskier proposition for borrowers and lenders alike.”

 

Sophie Hall, Head of Intermediary at Avelo, comments:

“The first half of the year saw the mortgage market provide a bright spark for the rest of the UK economy. So far, it is not showing any signs of burning out in the second half of 2013. The normally stagnant summer months are passing us by and have left buyer activity unscathed, as first time buyers clamour to take advantage of record low interest rates and Government support. Competition among lenders is heating up which will benefit would-be buyers, and the mortgage industry as a whole is bullish about the prospects for lending. In fact, many brokers are having to take steps to bolster their work force to cover the growing demand.”


Paul Hunt, managing director of Phoebus Software said:

“It’s good to see signs pointing to the robust nature of the property market thanks to the improvement in mortgage lending. Figures are positive for the lending picture as a whole with house purchase lending up 30% compared to a year ago, signalling there has been significant progress in the availability of high LTV mortgages in the past twelve months.

"Conditions have eased for first time buyers, and there’s a range of attractive mortgage deals to choose from. Lenders have been pivotal in boosting the mortgage market, and clearly they are more willing to lend to high LTV borrowers, which has led to a substantial rise in first-time buyer activity. Schemes such as Help to Buy and Funding for Lending have provided solid foundations for mortgage market growth. The Government is making steady progress in boosting first time buyer activity, which is crucial if mortgage lending targets are to be met in order to move the market forward.”

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