Mortgage approvals up for second month in a row
March 18, 2009
According to industry reports mortgage approvals in the UK have increased for the second month in a row in January, with a slight increase compared to mortgage lending levels for December.
The number of mortgages approved in December rose from the record lows that were seen in November, and the increase in mortgage loan approvals between December and January marks the second consecutive monthly rise in mortgage lending levels.
However, despite the more encouraging figures industry experts have said that mortgage lending still remains subdued compared to a year earlier, with mortgage approvals said to be around 43 percent lower in January of this year compared to January of last year.
At the peak of the market in July of 2007 over 67,000 mortgages were approved, and in January of last year the figure was 41,416 mortgage approvals. In January of this year the number of mortgages approved stood at 023,376.
Howard Archer, chief UK economist at IHS Global Insight, said: “The modest rise in mortgage approvals in January adds to the overall evidence that housing market activity may have bottomed out. Nevertheless, it is still at an extremely low level which suggests that further significant falls in house prices are likely.”
BBA statistics director, David Dooks, said: “The high street banks’ mortgage lending is still seeing double-digit annual growth, albeit in a much slower market. Lower borrowing costs and falling property prices have underpinned demand at these lenders, who are providing over two-thirds of all new mortgage lending.”
He added: “There is only limited demand from households for unsecured credit, while a fall in their deposits in January reflects a tendency to draw on cash or to move into alternative financial products.”
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