Mortgage approvals rise by nearly a fifth
The latest figures from the Bank of England have shown an increase of almost 20% in the amount of mortgage approvals granted in February this year compared to January.
The statistics have revealed that close to 38,000 mortgages were granted last month, compared to approximately 32,000 in January, indicating new hope for the housing market.
A combination of successive interest rate cuts and lower house prices could be the driving force behind the implied renewed buyer interest as mortgage approvals hit their highest level since May 2008.
In similar news last week, the British Bankers' Association (BBA) reported a rise in loans approved by the high street banks for people buying UK property. Although the upturn reported by the BBA was primarily attributed to the banks' greater market share as opposed to increased lending per se, the latest statistics from the Bank of England appear to indicate that house sales may be starting to recover.
The 37,937 mortgage approvals recorded for February was 6,442 above the six month average and surpassed economists' predictions of 34,000 (according to the median of 21 forecasts in a Bloomberg News survey).
Vicky Redwood of the macroeconomic research consultancy, Capital Economics, said that February's statistics imply that activity in the housing market "may finally have turned a corner."
More positive news for the housing market came in the form of recent statistics from the housing intelligence business, Hometrack, which showed a decline in the rate of house price drops this month – the lowest fall across England and Wales for 10 months.
Source: Telegraph.co.uk and Bloomberg.com | Last updated: 30th March 2009
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