| Mortgage approvals highest in October since March 2004, says BoE |
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LONDON: Mortgage approvals reached their highest levels since March 2004, according to the Bank of England, clearly indicating a continuing consolidation of the housing market. The number of home loans rose to 113,000 in October from 108,000 in September, the bank's official data revealed.
Analysts are optimistic that the approval figures would trigger price inflation and the market will really overcome its weakness in the new year.
The amount of mortgages approved rose to 7.634 billion pounds, against 7.505 billion pounds in September, the central bank said. The value of approvals for house purchases increased to13.6 billion pounds from 13.3 billion pounds in September -- biggest rise since May 2004.
These statistics compare with the remarks of mortgage lender Nationwide last week that house prices have stagnated in November indicating a stabilisation of the market rather than an upswing.
The total value of mortgage approvals -- including remortgaging -- rose by the largest amount since September 2003, increasing by 27.5 billion pounds in October from 27 billion pounds a month earlier.
In spite of the property market showing signs of revival, the high street continued to be in doldrums. The bank said consumer credit grew by a very narrow margin -- 1.273 billion pounds in October against 1.211 billion pounds a month earlier.
The total lending -- adding lending on dwellings and consumer credit -- rose by 8.9 billion pounds in October, up from 8.7 billion pounds in September.
In an earlier study, the British Bankers' Association had said home loans rose to the highest level in 16 months in October, gaining 40 per cent in the past year.
The retail industry is still wary of the trends. Marks and Spence Plc chief executive Stuart Rose has said the company is expecting a tough Christmas season.
Footfall, a retail industry researcher, said there has been a 8.5 per cent increase in store visits in the week ended 20 November as shoppers had expected seasonal discounts.
Although mortgage approvals may be up it still does not mean that people are back buying houses and property, it simply means a mortgage is in place to buy when ready and when a property is found that a potential buyer wants and can afford. It seems that every week there are press releases saying the housing market is stable, going to be fine and the like.
It is still difficult to comprehend how this is the case while first time buyers, with some exceptions of course, still cannot afford to buy and get on the property ladder unless they borrow far more than they can afford to repay. The conclusion remains here that the property and housing market remains unconvincing.
Posted
on : Wed, 30 Nov 2005 08:40 GMT | Mortgages News
By : Pippa Fielding
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