BoE: Mortgage approvals at six year high
The Bank of England said there were 71,638 mortgage approvals in December, up from 70,820 in the previous month and the highest number since January 2008.
The BoE attributed the rise to increasing availability and affordability of mortgage credit in the UK.
David Copland, director of mortgages at LSL Property Services, said: “The amount of mortgage lending is significantly gaining pace now, the key issue is how long can it continue before Mark Carney and the MPC raise interest rates?
“While we are still some way off the boom time of 2007, everything is heading back in that direction much more quickly than could have been anticipated.
“If interest rates, as expected, do not rise this year, I expect rates to start being increased in quarter 4 post general election.”
Duncan Kreeger, director of West One Loans, agreed that a lending recovery has begun.
He said: “No one would deny that Britain is having a lending recovery – but there are still many pockets of the economy which aren’t feeling the effects.
“Mainstream finance is focussed almost entirely on consumer mortgages, which is great for many UK households, but does nothing to help the growing need for business finance.
“While consumer lending surges ahead, lending to SMEs and businesses is limping behind – and the gap is widening.
“Mortgages aren’t a problem themselves – securing loans against property is an excellent way of reducing the exposure of lenders to risk while keeping the cost to borrowers relatively low.
“But without more business lending being made available to property developers, such an imbalance could aggravate the housing crisis.
“There’s plenty of reason to be optimistic in 2014 – but a recovery in lending that doesn’t cater for business can hardly be a recovery for long.”