12th December 2013
UK mortgage approvals jumped to 60,800 in October, 17% higher than September’s figure and 24% above the same period last year writes Philip Scott.
The data from trade body, the Council of Mortgage Lenders also revealed that first-time buyers were advanced 26,800 loans in October, the highest number of loans in a monthly period since November 2007. In addition, the number of loans advanced to home movers increased 19% in volume compared to September and was up 16% compared to October last year.
These latest numbers are the latest in a spate of strong news on housing market activity and will further fuel concern that the UK is gearing up for a new housing bubble.
The data follows on from a strong Royal Institute of Chartered Surveyors (RICS) survey for November which showed a sharp rise buyer enquiries.
But limited supply is one factor driving up prices in an increasing number of areas and not just in London and pockets of the South East as the RICS survey indicated that the headline sales-to-stock ratio rose to 34.5% in November, the second consecutive month above its long run average of 32% and the highest reading since October 2007.
Howard Archer , chief UK and European economist, at IHS Global Insight believes property prices look set to see further strong increases over the coming months despite the Bank of England ending Funding for Lending support for mortgage loans.
As the environment stands, he believes house prices could very well increase by around 8% in 2014.
Archer says: “While the strength of house price rises in London is a significant concern and pushing up the overall national increase in house prices, we are currently some way off from an overall housing market bubble emerging.
“Even so the RICS October survey indicated that house prices are now rising in every region and there is a very real danger 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.
“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.”