Mortgage approvals unexpectedly jumped to a 16-month high in July in a sign the housing market could be picking up.
According to new figures from the Bank of England, mortgage approvals for house purchases from 65,318 in June to 68,689 in July, beating the previous 2017 peak of 68,664 seen in January.
The Bank’s Money and Credit report showed that the total number of mortgages approved rose from 123,950 to 129,950 in July.
Approvals for remortgaging went up from 44,838 in June to 46,231, taking the total value up to £8.1 billion.
Howard Archer, chief economic adviser to the EY ITEM Club, said that despite July’s rise in mortgage approvals, house prices are unlikely to rise by more than 2% over 2017.
“While July’s marked pick-up in mortgages may ease some concerns over tepid housing market activity, we have doubts that it marks the start of a significant upturn. Mortgage activity can be volatile on a monthly basis,” he said.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said buyers and sellers are shrugging off concerns over Brexit and the election and getting on with moving.
“These figures are encouraging because they are reflecting what we have seen on the ground. We have noticed, however, that deals are not being done unless sellers are prepared to be realistic and accept that they may receive only one or very few offers on their properties compared with perhaps several 12 months earlier,” he said.
“Looking forward we anticipate much the same – no rapid improvement or decline but as our customers return from holiday they will hopefully return to home buying and selling mode sooner rather than later,” he added.
The lacklustre housing market activity has been weighing down on house prices. Recent data from the Nationwide shows that house prices edged down 0.1% in August after a small gain of 0.2% in July.
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