Mortgage approvals soar to highest since September

New figures published by UK Finance in recent days reveal that mortgage approvals hit a nine-month high in June.

According to the data, as many as 40,541 new mortgages were approved last month, despite experts previously predicting that approvals were unlikely to rise much above 39,000.

The value of approved loans pushed above the £8 billion mark for the first time since February, while the number of loans approved hit its highest since September, UK Finance said.

However, the number of re-mortgage approvals fell slightly month-on-month, from 29,732 to 29,354.

Meanwhile, commentators pointed out that June’s overall mortgage borrowing figures were still some 2.1 per cent lower than figures recorded during the same month last year.

Samuel Tombs, Chief UK Economist at Pantheon Macroeconomics, said: “Mortgage approvals continued to recover in June, reaching their highest level since September, but a plethora of indicators suggest that they won’t rise any further.

Fellow economist Howard Archer, added: “While housing market activity has climbed off its 2018 lows, the impression remains that the housing market it is still finding it hard to really gain traction in the face of still limited consumer purchasing power, fragile confidence and likely further gradual Bank of England interest rate rises over the coming months.”

On Thursday 2 August 2018, the Bank of England’s Monetary Policy Committee (MPC) is expected to vote on whether or not interest rates will be increased from their current low of 0.5 per cent.

The general consensus among commentators is that the MPC will move to increase rates to 0.75 per cent, following the publication of promising economic data earlier this month.

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Nick Davies
Nick is the Head of Property in our London office, having joined in the firm in 2005. His expertise covers a wide range of real estate transactions, with cases including both residential and commercial property deals, shops, pubs, restaurants, development sites, offices, lease renewals, enfranchisement, litigation and corporate support.