1st February 2016
Mortgage approvals for house purchases moved back up to a four-month high of 70,837 in December, according to new numbers from the Bank of England.
This is the second highest level since January 2014 and marks a rise from 70,424 in November, 69,933 in October and 69,212 in September.
However, the total remained just shy of the 19-month high of 70,933 witnessed in August last year.
While still just below August’s peak, approvals in December were up by 19.5% from the 17-month low of 59,254 seen in November 2014.
Howard Archer chief European & UK economist at IHS Economics believes that the Bank of England data suggests that housing market activity is still “pretty buoyant”.
He said: “It looks like it is currently being lifted by buy-to-let investors looking to make a purchase before April’s rise in Stamp Duty for the sector. Significantly, the RICS’ (Royal Institution of Chartered Surveyors) December survey indicated that house buyer enquiries rose for a ninth successive month in December, and at an increased rate.
“The Royal Institution of Chartered Surveyors (RICS) indicated that this was significantly influenced by increased buy-to-let interest.”
Looking ahead Archer expects house prices to rise by around 6% over 2016 “amid healthy buyer interest”. “The solid mortgage approvals reported by the Bank of England in December reinforce our belief that house prices are likely to see solid increases over the coming months,” he said.
However, Archer added: “The upside for house prices is expected to be constrained by more stretched house prices to earnings ratios and tighter checking of prospective mortgage borrowers by lenders. Furthermore, it is still very possible that interest rates could start edging up late on in 2016.”