Mortgage Lending Off to Strong Start in First Quarter of Year

Mortgage Lending Off to Strong Start in First Quarter of Year

Surprising data regarding the UK housing market continues to surface. The first two months of the year have confirmed one thing about the market, and that is there is no lack of confidence.  During the month of February mortgage lending once again took off in a month on month comparison. This followed a month in which estimates were beaten and new forecasts came about. The coming months appear anything but weak, according to many close to the housing market.

During the month of January, mortgage lending proved quite strong with a post of £21.8bn. This was an increase over the month of December by £1.4bn. This surge in mortgage lending led to an increase in house price growth during the month of February. January was one of the biggest lending months ever since the economic crisis back in 2008.

Record low interest rates are being pointed to as the key reason for the push in mortgage lending. Not only are original loans being scooped up in record numbers, but remortgage deals as well.

More than 47,100 remortgage loans were approved during the month of January which is quite close to an all-time high, according to the Bank of England. In addition to being a perfect time to remortgage according to many experts, the process has been streamlined as well. An application can be completed online and approval can be possible in just days.

Samuel Tombs of Pantheon Macroeconomics commented on the current data to emerge, saying: “The pick-up in mortgage approvals likely will run out of steam soon, given that mortgage rates have hit a floor and real incomes are set to stagnate this year.”

Tombs added: “Indeed, the number of people searching online for ‘mortgage’ - a good leading indicator of approvals - has declined over recent months.”

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