BoE: Mortgage approvals rise to highest level since 2016
Mortgage approvals for house purchase rose to 70,900 in January, the highest level since February 2016.
This increase represents a 4.4% rise on December 2019.
Looking at remortgages, the total figure increased by 3.9% to 52,100 in January.
Net mortgage borrowing by households reached £4bn in the first month of 2020, representing a 3.4% rise year-on-year.
Furthermore, the annual growth rate of consumer credit remained at 6.1%, and UK businesses made net repayments of £0.4bn in January.
Marc von Grundherr, director at Benham and Reeves, said: “The highest rate of mortgage approvals in almost three years and particularly so early in the year is yet further proof, if it were ever needed, that buyers are returning in their droves following December’s election result.
“It is this huge influx of demand that has seen prices increase at such notable rates of late and as a result, the market is now in the best shape it’s been since the EU Referendum itself.
“Not only are seeing performance exceed expectations but there is a very real chance of an interest rate cut on the horizon, which will further boost buyer sentiment, borrowing, and overall market performance.”
Richard Pike sales and marketing director at Phoebus Software, added: “This is our first insight into the mortgage lending figures for January and it has to be said that it is a reassuring picture that reflects a boost in confidence since the general election.
“Coronavirus is already having an effect on worldwide markets and, of course, we have the EU negotiations kicking off in earnest again this week. Add to that the impending budget and there is a lot for people to think about.
“Nonetheless, the general malaise the market has suffered since 2016 seems to be behind us for now so we have to be optimistic, the budget may well give us all a nice surprise.”
Andrew Montlake, managing director at Coreco, said: “A combination of Brexit lethargy in the closing stages of 2019 and Boris Johnson’s landslide General Election win saw a major bounce back for mortgage approvals in January.
“During November and the first half of December many people sought to get their houses in order before the nation went to the polls. Once the general election result was in even more people started to make their move.
“Homeowners and prospective buyers alike are wary of future house price rises and are seeking to buy property before the market moves against them.
“The big question is how long the ‘Boris Bounce’ lasts, as while there is a sense of optimism at present that could fade very quickly if trade negotiations turn sour.”