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Mortgage approvals jump to highest level for two years

The UK housing market has shown signs of a revival after figures showed that banks and construction companies approved the largest number of mortgages last month.

Trade organization UK Finance said lenders approved 42,989 mortgages in April – most since February 2017 – which were 6% higher than 40,564 in March and 11.5% higher than a year earlier, on a seasonally adjusted basis.

Approvals for remortgaging increased by 5% to 31,152 between March and April and were 11% higher on an annual basis.

But the figures also show that the growth in total net lending – gross lending minus repayments – slowed down to £ 1.8 billion in April from £ 2.4 billion in March.

Gross mortgage loans also declined 1.4% to £ 20.3 billion on an annual basis.

Experts in the real estate market say the figures suggest resilience in the light of Brexit uncertainty and come after the sector saw a sharp slowdown before the original Brexit deadline of March 29.

Jeremy Leaf, a broker in North London and a former RICS president, lived: “Home purchase approvals, which are the most important element of these figures, were significantly higher in April, but reflected a rather up and down period for the market.

“Nevertheless, it is positive and again the question appears to be more resilient, what it should be at this time of the year.”

Howard Archer, chief economic adviser to the EY Item Club, said the real estate market may have been stimulated by the delay in the Brexit deadline.

He said: “The noticeable rise in mortgage approvals in April suggests that activity in the housing market may have received at least some temporary support by avoiding a disruptive Brexit at the end of March.

“It may also be very good that the housing market has benefited from the recent improved consumer purchasing power and a strong growth in employment.”

The UK Finance data also revealed that credit card loans rose 11.7% year on year to £ 11.4 billion, not seasonal.

UK Finance said that consumers do not burden themselves with high credit card debts, but instead chose to use more plastic and pay off every month.

It said: “This growth in spending reflects the increased consumer preference to use credit cards as a means of payment, particularly online, due to purchase protection and card benefits.

“Reimbursements have remained in line with credit card spending, which generally shows that consumers manage their finances effectively.”

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