Despite uncertainty over the election, the amount of mortgages for new homes approved in April rose at the fastest rate since the same month in 2009, new research by the Bank of England has revealed.
Approximately 68,076 mortgages approved for house purchase in April, set in stark contrast to the equivalent figure for March, 61,945. This constitutes growth of 9.9%; the most dramatic monthly percentage change since 2009. The total number of mortgages granted also showed a marked increase and is the highest figure the sector has seen for 14 months.
Transaction value for home purchases also leapt to £11.1 billion; a rise of 7.9%. Lending value for house purchases is the greatest since last February.
Points of Interest
This peak appears to stand in contrast to popular opinion: that ambiguity over election results would produce a negative impact on buyer intentions.
Together with the greatest number of re-mortgaging granted since January 2014, the rise proves that buyers are emboldened by current low mortgage rates. Land Registry figures for April sales demonstrated gentle house price increases, rising 0.9% from March to April.
Analyst Outlook
Director of independent mortgage broker London Money, Martin Stewart, said he believed a mixture of low mortgage rates and a secure labour market would ensure a positive future for the housing sector:
“While there is certainly more caution in the market at present than a year or so ago — among borrowers and lenders alike — mortgage rates are so competitive that they are inducing people to commit to a home purchase.
We’re finding that borrowers are a lot more confident, too. Low and now negative inflation has had a tangible impact on household finances and people feel more secure in their jobs. Coupled with a low interest rate environment and you have all the ingredients for a strengthening property market.
As we enter the summer, I would expect the mortgage approval numbers to push on even further”.
A final point
Election uncertainty now looks to be fully resolved; we can expect both house price growth as well as mortgage approvals to step up a gear over the summer.