Number of mortgage approvals increases

March 11, 2016 by Brendan O'Neill

Property Market

The mortgage market is off to a good start this year, as the number of mortgage approvals has increased by one third, in comparison to January last year.

According to reports from high street banks, the figures may have increased due to the number of buy-to-let investors trying to complete their transactions before the new stamp duty rules kick in.

Data produced by the British Bankers’ Association (BBA) indicates that the number of re-mortgages and purchases are both higher than last year. During January 2016, there were 80,285 mortgages approved by members of the BBA, which is the highest number for the last two years. The figure for re-mortgages has increased by 42%, while the number of house purchase loans has increased by 27%.

The average figure loaned to borrowers buying a property has risen to £178,900, while the average amount borrowed for a re-mortgage is now £181,800. Lending is now at its highest since 2008, with the total value of mortgages reaching £13.6bn.

According to the chief economist of the BBA, Richard Woolhouse, one of the reasons why this may have occurred is people trying to secure a second home or buy-to-let before the new stamp duty increases take place in April. Stamp duty rates on second homes and buy-to-let will increase by three percentage points.

As the property market remains strong in 2016, buyers may need to seek advice from a mortgage adviser who has CeMAP training from a company which has a good reputation for the delivery of training courses.