Following a period of inertia, the value of March mortgage approvals showed tentative signs of recovery. This could signal the return of a pattern of consistent year-on-year growth last seen between 2011 and 2017. (**Based on Bank of England figures – see graphs below showing 2013-2019 only and an overview showing 2010-2019).
Additionally, a *report from ‘UK Finance’ reveals that the number of home-loan approvals increased to 39,980 in March (see graph to the right). This represents a 6 percent increase since March 2018. Given that many Brexit commentators had forecast continued market lethargy, these results perhaps herald a welcome return to normality.
Richard Sexton, Director at e.surv, said: “Mortgage interest rates have increased slightly compared to the rock-bottom lows of the last few years. However, rates are still close to their historic lows which is good news for those looking to take their first steps. This is reflected in the number of approvals this month.”
The report also reveals that annual growth in consumer credit has increased to a ten-month high of 4.1 percent. This suggests strong retail sales, at least partially financed using unsecured debt. However, the increase is amplified by a lack of retail activity in March 2018 when the UK endured snow storms and icy conditions. None the less consumers are thought to be more positive given record employment levels, rising real incomes and an increasing level of Brexit-apathy.
*UK Finance’s report covers seven High Street banks which equates to about 60% of the mortgage market and shows the number of home-loan approvals. ** Bank of England data shows the overall value of mortgage approvals and remortgages on a month by month basis.
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