Mortgage approvals rise ahead of interest rates hike

Figures from the Bank of England show that mortgage approvals, which do not represent completed purchases (but are a strong indicator), rose 16.4% to 68,764 in July compared with November 2014’s 17-month low of just over 59,000.

Tighter rules on mortgage lending took effect a year ago, requiring banks and building societies to make more rigorous checks on whether borrowers could afford their loans.

But Tuesday’s figures add to signs the housing market is heating up again. He said that ” it is possible that July’s performance may have been lifted by some house buyers looking to move quickly to try and lock in a low mortgage interest rate before they start rising”.

However, despite this, Archer has slightly tempered his expectations for the first UK rate rise.

Remortgaging activity was spurred on after Bank of England Governor Mark Carney said the case for raising the Bank’s base rate would come into clearer focus at the end of the year. “Savvy borrowers are therefore increasingly making the most of house price rises by releasing money from their homes”.

Mortgage Advice Bureau head of lending Brian Murphy says: “Mortgage approvals continued to climb in July, with the number of approvals for remortgage in particular seeing a significant annual increase”.

This morning, HSBC reduced the rate on its five-year fixed rate mortgage, which now comes with a 3.49 per cent for applicants who borrow up to £400,000 at 90 per cent loan-to-value.

Total lending to individuals increased by GBP 3.9 billion in July. Credit gained 0.7 percent month-on-month and by 7.5 percent from a year ago.