Bank of England – Mortgage approvals defy uncertainty with January rise
Mortgage market activity continues to remain stable with a rise in approvals, according to the latest Money and Credit statistics from the Bank of England.
Mortgage approvals for house purchase increased in January to 66,800, slightly above the average of the previous six months of 65,500.
Additionally, remortgage approvals rose to 50,400, higher that the recent average of 48,900.
Net mortgage borrowing by households fell slightly on the month to £3.7 billion, below the £3.9 billion average of the past six months.
Andrew Montlake, director of Coreco, commented: “Many prospective buyers are waiting for more certainty but ironically it’s the current uncertainty that is strengthening their hands.
“They are waiting for a window of opportunity and may be disappointed when they discover that this was it.
“The mortgage market is being driven by remortgages and first-time buyers, who are benefiting from Help to Buy, reduced landlord competition, a strong jobs market and the Bank of Mum and Dad.
“For first time buyers, in particular, now is a perfect time to buy, something that is almost certainly underlined by the rise in approvals for house purchase in January.
“There is so much competition in the market that a growing number of lenders are shifting their attention towards higher LTV loans and rates are coming down as a result. This is providing a real boost to first time buyers.
“Right now, buyers hold all the cards and sellers are increasingly waking up to the fact that if they want to sell, they need to lower their asking prices.
“There is still a disconnect between the expectations of buyers and sellers, but it is considerably less pronounced.
“What we’re also seeing is a lot of pent-up demand come through. People have been holding off for quite some time and are now finally starting to act.
“While it’s a buyers’ market at present, that could change almost overnight in the event that a deal is struck with Brussels.”
Source: Mortgage Strategy