A recent report from the Bank of England has shown that mortgage approvals rose sharply during October, indicating that demand has increased within the housing market.
For a large portion of 2016, the number of mortgage approvals had seen a downward trend, although October’s figures have surpassed the estimates. In September, 63,594 mortgages were approved, while October’s figures rose sharply to 67,518, surpassing the estimate of 65,000. According to mortgage brokers, it is likely that homeowners are maximising the benefits of cheap mortgage deals, which is fuelling the current high property prices.
During the six months to October, the average monthly increase in lending to households was £3.5 billion. In October, this figure increased to £4.2 billion. The UK economist for Capital Economics, Ruth Gregory, said:
“October’s UK money and credit figures provided further evidence that the slowdown in mortgage lending has bottomed out and that the appetite for debt hasn’t taken much of a hit following the Brexit vote.”
She added that this was consistent with other indications that buyer demand was increasing in the property market, although not yet at the levels experienced during the early part of 2016. One broker warned that low mortgage rates may start to disappear as swap rates start to rise, with longer term fixed rate deals becoming more expensive. However, there are still some very attractive fixed rate deals available, along with others, which is why many people find that the services of a CeMAP qualified mortgage advisers are required.