Gross mortgage lending hits highest rate since 2008 but approvals fall short of August’s peak

4th January 2016


The latest mortgage numbers from the Bank of England indicate that while the UK’s housing market remains pretty strong there has been a slight cooling in activity.

It confirmed that gross mortgage lending amounted to £20.3bn in November, which was up from £20.1bn in October – the highest gross mortgage monthly levels since mid-2008.

The Bank also reported that mortgage approvals for house purchases moved back up to 70,410 in November from 69,867 in October and 69,168 in September but remained below the 19-month high of 70,864 witnessed in August.

However while the total is still just below August’s peak level, November’s tally was still at the second highest level since January 2014 and 18.8% higher on the 17-month low of 59,279 seen in November 2014.

Commenting on the figures Howard Archer, chief UK and European economist at IHS Global Insight noted that while the latest RICS survey indicated that buyer enquiries rose for an eighth successive month in November, the rate of increase has slowed recently and in November was at the slowest rate since April.

He said:  “It may well be that a shortage of properties on the market is limiting housing market activity. The latest RICS survey reported that new instructions fell for the 15th time in 16 months in November with the result that average stocks per surveyor fell to a survey low.”

Looking ahead, Archer expects house prices to rise around 6% in 2016 amid decent buyer interest, “supported by largely favourable fundamentals and a shortage of properties”.

He added: “It remains to be seen how the Chancellor’s measures in the Autumn Statement affect the housing market. In the near term, it is very possible that the decision to impose a 3% surcharge on Stamp Duty on purchases of buy-to-let properties and second homes from April 2016 will lead to an increase in housing demand and exert upward pressure on prices as prospective buyers look to beat the increase.

“Further out, the move could modestly dilute housing market activity and upward pressure on prices. While the Chancellor has announced measures aimed at boosting housebuilding in the Autumn Statement, it will take time before they have a significant impact on housing supply – and that is assuming that the measures prove successful.”

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