Mortgage approvals leap to the highest level for five years

The number of mortgages approved jumped to its highest level for almost five years in December.

In what The Guardian describes as “the latest sign of a revival in the housing market”, mortgage approvals for house purchases increased to 46,815 in December compared with 44,058 a month earlier – the highest level since April 2015.

UK Finance, the trade body that represents major high street banks, said the value of mortgage lending increased the most since March 2016, rising by a net £3.8bn.

However, as City AM points out, mortgage lending in the UK actually fell in 2019 overall.

“Transaction levels and overall lending volumes in 2019 were still low by historical standards, but in the circumstances they held up exceptionally well,” remarked Sam Harhat, head of financial services at Andrews Property Group.

Howard Archer, the chief economic adviser to the EY Item Club, said mortgage approvals were probably lifted by an uptick in confidence and political certainty after the December general election.

“Prior to November, mortgage approvals for house purchases had fallen back for three successive months to be at a seven-month low in October, indicating that activity was being pressurised by heightened uncertainties over the domestic political situation and Brexit,” he said.

There could be more good news on the horizon, according to Samuel Tombs, chief UK economist at Pantheon Macroeconomics. He said the “additional boost to approvals from the result of the general election still is to come”.

Ben Johnston, director of Houso, the off-market property app, told Yahoo: “The market is moving in the right direction... but more emphasis is also needed on the government sorting out stamp duty in the budget.”

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