Home.co.uk
Home.co.uk

News: Mortgage approvals leap but still down on last year.

Fri, 13 Feb 15


House purchase mortgage approvals saw the fastest month-on-month increase in over five-and-a-half years in January 2015, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.

There were 65,778 house purchase approvals in January, 9.1 per cent higher than December 2014, the largest monthly rise since April 2009.

But on an annual basis, house purchase approvals fell 12.9 per cent compared to last year, with 9,779 fewer approvals than in January 2014 (75,557). This makes January 2015 the fifth consecutive month in which the number of loans has fallen on an annual basis.

The balance between cooling and growth, as the country’s real estate market moderates, is echoed by new figures from the Royal Institution of Chartered Surveyors and form Home.co.uk.

The RICS survey’s headline price net balance came in at +7, showing a further moderation in the rate of growth with London still the only area where more respondents are reporting falling rather than rising prices. Indeed the London reading fell further into negative territory in January with a net balance of 49 per cent of surveyors seeing prices fall.

Nonetheless, transactions are still expected to grow, with RICS members agreeing that sales showed a "modest increase" in January, thanks to a mortgage war among lenders, as rates fall.

"Near-term sales expectations have moderated slightly with a net balance of 10% of respondents now envisaging an increase over the coming three months, from 19%
previously," says RICS. "However, at the twelve month horizon respondents remain more optimistic that activity levels will increase, with an unchanged balance of 48% of surveyors still expecting sales to rise."

Richard Sexton, director of e.surv chartered surveyors, explains: “The new year has brought a new market, and lenders have a desire to return to growth. The January lending up-tick is testament to this, as borrowers key in to mortgages while interest rates remain at historic lows. However, undoubtedly, some potential borrowers remain thoughtful about the approaching election and are playing a waiting game.

"The market’s young shoots of growth will continue to be guided, supported and at times restrained by a rigid structure of legislation. Whilst the Mortgage Market Review and LTI caps are preventing what has previously been perceived as higher risk lending, equally we have Help-to-Buy supporting and encouraging first-time buyers. With the announcement that the Bank’s Monetary Policy Committee is going to be given new abilities to place caps on LTV ratios, it looks like the purchase mortgage market could be closely managed and scrutinised in the run-up to the General Election."


Home.co.uk also reported slower price growth and that properties are piling up on the market in London as supply finally begins to surpass demand.


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