Mortgage approvals for house purchase up 24%, say banks

Mortgage approvals for house purchase up 24%, say banks

Mortgage approvals for both house purchase and remortgaging by high street banks shot up last month, boosted by Government schemes.

The latest data from the British Bankers’ Association is in line with other reports, and is the clearest evidence so far of a housing market upturn in the second quarter of this year.

According to the BBA, approvals for house purchase were 24% higher than in May last year, helped by Funding for Lending and Help to Buy – and ahead of analysts' expectations.

Remortgaging approvals also rose, by 17%.

The average house purchase approval rose to £159,200, up from £156,200 in April.

After a poor start to the year, the number of house purchase approvals stood at 36,102 compared with 32,952 in April and 32,491 in May last year.

Remortgage approvals went up to 20,675, a rise from 19,535 in April and up from 17,739 in May last year.

However, net borrowing declined as people apparently used low interest rates to concentrate on paying down their mortgage debt.

* Further evidence of the market's growing strength comes from Sequence, part of the Connells group, which says that house prices across their 300-branch network in May grew 3% in comparison with April, and are up 4% on a year ago.

Average prices in London went up 4% during May, says the company.

Sequence says that according to its data, the average price of a UK property at exchange is now £197,598.

It also says that transactions have gone up 12% annually, despite dropping 1% in April. In London, transactions last month were 19% up on a year ago, despite the same 1% drop in April.