24th July 2015
Mortgage approvals rose by more than expected last month, showing the UK property market has no intention of slowing down.
Figures from the British Bankers’ Association shows that mortgage approvals, which have been steadily improving over the past five months and last month approvals reached 44,500 – up from 42,900 the month before and more than the 43,500 expected.
Gross mortgage borrowing in May was £10.4 billion, similar to April by 5% lower than the same period last year.
Richard Woolhouse, chief economist at the BBC, said: ‘The increase in mortgage approvals this month is consistent with the trend we’ve seen since the start of the year. The numbers show that the property market remains buoyant after the general election.
‘Fierce competition between lenders means that there are some great mortgage deals available from the high street banks.’
Charlotte Nelson of comparison site Moneyfacts.co.uk said the approval figures were good news for borrowers.
‘This rise is partly fuelled by record-low mortgage deals: the average two-year fixed rate mortgage has fallen from 3.67% a year ago to 2.75% today, and borrowers are clearly taking advantage of these low rates to secure lower monthly repayments.’
However, Nelson warned that Bank of England governor Mark Carney has already indicated interest rates will rise so which will have a knock-on effect for mortgage rates.
‘With Mark Carney’s announcement that base rate is likely to rise in the near future, these low rates will not be around for long,’ she said.
‘Borrowers still sitting on the standard variable rate or coming to the end of a fixed mortgage deal need to act fast to secure a low rate.’