Mortgage approvals rise to six-month high

Mortgage approvals for house purchases rose in January to £16.8bn, the highest figure since last summer, and some distance above the pre-pandemic average, according to the latest officials figures.

The Bank of England said the value of mortgage approvals rose by 4.2% from December to its highest figure since last June, after 73,992 mortgages for house purchase were approved, also up sharply on the prior month.

Barring the surge in house purchases seen in the aftermath of the covid pandemic through to last June, the value of house purchases mortgage approvals has not been as high as recorded this January since prior to the 2008 global financial crisis.

The 74,000 mortgages approved in January is 11% above the average figure for the 12 months leading up to the start of the pandemic to February 2020.

The figures will come as a boost amidst concern over potential headwinds facing the UK housing market from the rising cost of living, slowing economic growth, rising interest rates and the Ukraine crisis. The Bank of England also reported that gross mortgage lending rose to £23.8bn in January, from £22bn in December.

Jonathan Samuels, CEO of Octane Capital, said the figures showed the UK remained “undeterred in its quest for homeownership.”

He said: “Even with the cost of living on the rise, buyers are piling into property with almost as much enthusiasm as they were during the stamp duty holiday.”

Geoff Garrett, director of mortgage provider Henry Dannell, said the appetite to buy homes meant estate agents were continuing to suffer from empty shelves. “This lack of stock reaching the market means house prices continue to climb and buyers are having to borrow more to climb the ladder.

Despite fears over interest rates rising, he said: “Lenders remain undeterred in funding this activity and there is little sign of this changing. In fact, even with rates predicted to rise further, some institutions remain ultra-competitive as they seek to elbow their competitors out of the way and take advantage of this homebuyer demand.”