Liquid error: wrong number of arguments (2 for 1) Mortgage Approvals Hits Four-Year High | Marsh & Parsons Sales and Lettings Estate Agents London

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Mortgage Approvals Hits Four-Year High

Wed 01 Jan 2014

Mortgage approvals for house purchases climbed to a 47-month high in November, figures showed today, fuelling concerns over a possible house price bubble.

Mortgage approvals reached 45,044 last month, up from 43,315 in October and well above a low of 30,861 hit in February, according to the British Bankers Association.

This was up 38.7 per cent year-on-year November 2012, and sees mortgage approvals getting back up towards their monthly average of 53,908 during 1997-2013. There was a peak of 78,153 in November 2006. BBA statistics director, David Dooks said: ?More new mortgages and a net rise in borrowing reflected a stronger mortgage market in November. With approvals up a third on a year earlier, lending will continue to be strong in the months ahead? The strong mortgage lending figures come a day after Britain's largest mortgage lender predicted that house prices will continue to rise in 2014 at a similar pace to that seen this year.

The Halifax forecasts property values to rise by between four and eight per cent next year as the economic recovery and low interest rates continue to support the market. This year has seen property values boom with the Halifax house price index showing growth of 7.4 per cent. In January, the average home was valued at 162,844 compared to 174,910 in November 2013. And data released by HM Revenue & Customs said the number of UK homes being sold has shot up by 24 per cent over the past year.

Some 96,769 houses changed hands during November, the highest since December 2009. Peter Rollings, boss of estate agent Marsh & Parsons, said the figures showed the UK housing market was returning to form. Howard Archer, chief economist at IHS Global said: While concern over the strength of house price rises has been primarily focused on London, it is evident from a number of recent surveys and data releases that the strength in house prices is becoming more widespread amid rising buyer interest and strengthening market activity across regions.

Indeed, there is a very real risk that house prices could really take off over the coming months, especially if already significantly improving housing market activity and rising buyer interest is lifted appreciably further by the, Help to Buy, mortgage guarantee scheme which was launched in October, Archer added. Last week, the Royal Institution of Chartered Surveyors predicted that an acute lack of houses coming onto the market will see house prices rise 8 per cent next year Its forecast suggested 2014 will bring more of the same for the UK housing market - too few houses available to meet growing demand that is being boosted by Government policies.

All parts of the country could see house price rises but it will be the London market that gains the most, rising 11 per cent, according to RICS. Concerns about a possible UK housing market bubble are leading the Bank of England to keep an eye on the affordability of mortgages and the lending policy of banks.

Minutes from the November meeting of the Banks Financial Policy Committee, published at the start of this month, showed that concerns about the housing market have risen since their last meeting in June.'Committee members had become more concerned about the potential risks to financial stability that might arise from developments in the UK housing market,' the minutes said.

Following the November FPC meeting, the Bank announced that the governments flagship Funding for Lending Scheme (FLS), which supplies cheaper money to banks and building societies, would end a year early for mortgages to focus on small businesses. The Bank of England and the Treasury to end Funding for Lending support for lending to households from January looks a highly sensible decision, although in itself it is unlikely to act as a major brake on housing market activity, Howard Archer said.

We believe that it is very important that the Bank of England has indicated that it is prepared to take further action to rein in the housing market if prices rise markedly amid ongoing strengthening activity, he added.

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