BoE: Mortgage approvals on the rise
The number of approvals for remortgaging was 35,261 compared to the average of 33,827 over the previous six months.
But loans (including overdrafts) to non-financial businesses decreased by £1.1bn in October, compared to the average monthly decrease of £1.3bn over the previous six months.
David Brown, commercial director of LSL Property Services, said: “Momentum is the target now, and it seems we’re gathering speed.
“The property market isn’t anywhere near what would once have been called ‘normal conditions’, but we’re going in the right direction.
“Such momentum is a stepping stone to a self-sufficient mortgage market. Lending will have to run under its own steam at some point, and yesterday’s shock withdrawal of support from Funding for Lending makes that clearer than ever.
“But it’s worth realising that the Treasury’s Help to Buy scheme is only in its infancy. Help to Buy still has the power to have a significant impact – at least for a cohort of buyers.
“Further ahead, the real challenge is translating healthier prices and transactions volumes into more homes.
“If house building starts to happen to a significant extent, then the property industry will be less of a zero-sum game – and the fundamental prospects for first-time buyers would be transformed.”
Brian Murphy, head of lending at Mortgage Advice Bureau, added: “Today’s figures show the value of mortgages approved so far in 2013 [£141.5bn] has almost caught up with last year’s annual total [£143.7bn] with two months still to go.
“Central measures to accelerate the housing market’s growth have clearly worked: back in January there were unanswered questions about how first-time buyers and those with small deposits might benefit, but the arrival of Help to Buy has brought relief in both respects.
“Far from being left to go it alone in 2014 without the Funding for Lending Scheme, mortgage lenders are set to engage with Help to Buy in increasing numbers and those who don’t will still have access to vastly improved funding markets.
“Any fears that waving goodbye to FLS will end this ‘golden age’ of mortgage rates should be offset by a calming effect on house price growth.
“No-one wants to see buyers priced out of the market, and in that respect the Bank has sent a clear message that it’s on mortgage borrowers’ side and wants to keep the market simmering rather than boiling over.
“With increasing numbers looking to make a move in the near future, a five and a half year high for mortgage approvals is just the encouragement they need.”