The number of mortgage approvals in the UK shot up by 24% in May, revealing the buoyant nature of the UK’s housing market.
Figures from the British Bankers Association (BBA) showed that the number of house purchase mortgages given the green light in May increased by 7,000 in a year-on-year comparison to reach a figure of 36,102.
The number of mortgage approvals in London and the West Midlands surpassed average growth figures, leaping by 26%, while nationally the increase reached an overall figure of 19%.
Commenting on the figures, Matthew Pointon, a property economist at Capital Economics, said:
“Mortgage approvals are gradually clawing their way back up after five years of very subdued activity, and government interventions are likely to mean this improvement continues.”
However, he also offered a note of caution, saying: “Market conditions can change quickly once support is withdrawn, and any house price gains are unlikely to be sustainable.”
BBA figures also showed that the average mortgage amount increased by £3,000 to £159,200, with the total number of approved mortgages reaching a total of £5.5bn.
Remortgage activity also took an upward turn, according to figures from the BBA, making up 20,675 approvals worth £3bn.
Recent figures from the Council of Mortgage Lenders (CML) also revealed a pick-up in mortgage activity, with mortgage lending rising by 21% in the month to May to reach a figure of £14.7bn.
This represents the highest level of mortgage lending since 2008. Commenting on the reasons behind the increase, CML’s chief economist, Bob Pannell, said:
“Funding conditions, helped by the Funding for Lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.”