BoE: Mortgage approvals up for third consecutive month

Permalink: BoE: Mortgage approvals up for third consecutive month
by Kay Murchie

According to figures released by the Bank of England today, the number of mortgages approved for house purchase in the UK rose for the third consecutive month in April, up from 40,038 in March to 43,201.

While the number of mortgage approvals were still down by almost 22% year-on-year, April’s figure exceeded analysts’ forecast of 41,000 and are further signs of a recovery in the housing market.

Mortgage approvals plummeted to record lows last year due to the tightening of lending criteria, however, figures show that of the 1,623 mortgage deals currently on offer, two-thirds still require a deposit of at least 25%.

In the meantime, remortgaging activity fell again in April, reflecting a trend for borrowers coming off fixed-rate deals to remain on their existing lenders’ standard variable rates, due to record low interest rates.

In related news this week, the Land Registry reported that house prices fell by 0.3% in April in England and Wales and follows on from a 0.2% fall the previous month, and takes the annual rate of decline to 16.2%.

Furthermore, Hometrack reported that house prices remained unchanged in May, while just last week, the Nationwide reported a rise in prices of 1.2% in May.

The Land Registry said: “Although property prices are still falling, the speed of the fall has been fairly static over the last couple of months.”

However, many commentators caution that rising unemployment and the ongoing tightening of lending criteria means house prices are likely to resume their downward spiral.