Mortgage approvals in January rose to the highest level in six years, with the volume and value rising consistently for 11 successive months.
Bank of England data found that mortgage approvals reached 76,947 in January, up from 72,978 in December and up 42.4 per cent on this time last year.
However, the amount individuals are borrowing fell by 3 per cent, suggesting the size of mortgage loans is not increasing at the rate of house prices.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), said: “Many aspiring buyers are still in vital need of support through affordable loans. The growth of approvals is particularly good news for owner-occupiers, especially with the house buying market growing noticeably faster than remortgages [volumes rose by 13 per cent and 3 per cent respectively between October and January].
“With £18.6bn of lending recorded in the first month of 2014, the market is on course to continue its recovery. Regulatory change in April means we may see lending activity impacted, but we can expect a stronger and more rounded market to emerge from the shadows this year, especially with low interest rates preserved for now and Help to Buy 2 getting into gear.
“However, we are still a long way from a full recovery and there is plenty of capacity to support a more expansive and sustainable mortgage market without the continued need for extraordinary support. To get us there, important decisions need to be made and action taken to address the future balance of lending, house building and regulation. With cash playing a stronger role in the market last year than at any other time during or since the recession¹, whether for full purchases or as a deposit, there is much to consider.”
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