Mortgage approvals soar as property purchases rise by 20% in 2013
The quantity of mortgage approvals last year for property purchases increased by a staggering 20% over the course of last year, a significant improvement from the low activity displayed back in 2012.
The news marks a remarkable turnaround in the property market, which up until last year had experienced a period of stagnation and low consumer confidence levels.
Compelling data released by the Bank of England today identified that over 730,000 mortgage applications were approved last year alone, with the rate of acceptance hastening significantly in the latter months of 2013.
This compares to just 612,654 approvals in 2012, and displays the success of the governmentís Funding for Lending and Help to Buy schemes for reinvigorating the property market and assisting young first-time buyers enter onto the property ladder.
The Bank of England outlined that there was still much work to be done to ensure a full recovery in the housing market, and that lending figures remain far lower than they were prior to the start of the recession back in 2007.
Nevertheless, with new found consumer confidence and a rapidly improving sale rate, it can be argued 2013 was a landmark year in the recovery of the property market, and praise should be reserved for the current administration for
sticking to their convictions and implementing the right policy for the right time.
The number of mortgages approved for house purchases rose by 20% in 2013 compared with the market doldrums of the previous year.
Greater lending levels expected
Mark Harris, chief executive at SPF Private Clients, has identified that it is likely that demand will continue to soar during the course of this year, but warned that the costs of acquiring one would likely stay the same.
"We expect this to continue this year as Help to Buy gets into its stride and lending appetite remains strong, with most lenders aiming to do more lending than they did last year," he said.
"While we don't expect mortgage rates to shoot up in the short term, fixed rates have bottomed out and are starting to climb again so borrowers need to think ahead.
"However, there is no need to panic just yet. It is still possible to fix for five years at around 3%, which is incredibly good value."
The Bank of England had previously argued that the revitalisation within the property market had had a knock on effect in the loan industry, with the UKís personal loan debt reaching over £1.4 trillion last month.
Richard Koch, head of policy at the UK Cards Association, highlighted that credit card borrowing had decreased substantially over the past few years and remains low at present, despite a recent resurgence in the industry.
Mr Koch argued that this was a result of financial institutions being more cautious when lending money out, and consumers being more prudent with their borrowing than they were prior to the recession.
"Consumers are now using the interest free periods that credit cards offer and then paying off their balances faster," he said.
"Responsible lending is at the heart of the industry, and the vast majority of consumers use their credit card prudently.
However for those individual consumers that are facing difficulty, for example after a change in personal circumstances such as redundancy, illness or separation, there is a clearly established system of support including sources of free, independent debt advice."
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