Slight increase in mortgage approvals in December 2008

January 31, 2009 by Brendan O'Neill

Mortgage Advisors

News

The Bank of England has reported that there was a small increase in the number of approved mortgages in December as mortgage advisers enjoyed more success in finding mortgage deals for borrowers.

December saw a total of 31,000 approved mortgages for house buyers, which is an increase of 4,000 from the 27,000 approved mortgages in November. Although a slight rise, December’s figure of 31,000 approved mortgage offers represents the all-time second lowest total of approved mortgages in a month, behind November 2008.

To further back up news of a possible turnaround in the housing market, property sales have increased as well according to HM Revenue and Customs.

However, a possible rise in the housing market has been denied by industry experts due to the lack of funds in the UK’s banks. This, it is believed, will lead to an increase in refusals on mortgage applications.

2008 saw mortgage approvals drop by 58% to just 519,000 approved mortgages, from the 1,250,000 approved mortgages granted in 2007.

The Building Societies Association’s Adrian Coles stated:

Activity in the housing market remains very depressed, and as a result the amount of mortgage lending in December was low.

House prices are widely expected to fall further and unemployment is rising, so potential buyers remain cautious and are staying out of the market as they wait for it to stabilise.