Mortgage approvals up 16% in February

Number of approvals rises strongly but total lending only slightly up and still half that of a year ago.
The number of mortgages for new house purchases approved rose by 16% in February on the previous month to 28,179, according to the latest data from the British Bankers Association (BBA).
This figure is also significantly higher than the six-month average of 22,068. In addition, banks approved £7.8bn of mortgages in February, a marginal rise on the January figure of £7.6bn.
However, the £7.8bn mortgage approval figure was still less than half the equivalent for the same month last year, falling by 56.5%.
In addition, the actual amount of money issued by banks on mortgages, which lags the approval of mortgages by around a month, was higher than the mortgage approval figure, at £9.2bn, meaning the overall trend is still for a decreasing amount of lending. The £9.2bn gross mortgage lending figure was its lowest level since June 2001.
Markets reacted positively to the “encouraging” data. Charlie Campbell, analyst for Liberum Capital, said: “This is not the bottom of the housing market, but at least it's the end of the period of freefall, and might mean volumes increase this year even as prices continue to weaken.”
Simon Rubinsohn, chief economist at the RICS, said the data showed that the increase in buyer enquiries highlighted previously by the RICS was now feeding through into actual transactions. He said: “Suggestions that the heightened level of interest was just window shopping are clearly misplaced.”
Source:24 March, 2009
By Joey Gardiner
www.building.co.uk