New figures from the Bank of England show that UK mortgage approvals hit an eight-month high in November.
The Bank’s Money and Credit report showed that mortgage approvals for house purchases edged up to 67,505 in November – up 10.0% from August’s low of 61,359.
Net mortgage lending went up by £3.2 billion in November, in line with the previous three months.
The number of approvals for remortgaging was 45,683, up from 43,778 the previous month.
Howard Archer, chief economist at IHS Global Insight, said: “The overall impression coming from latest data and surveys is that while housing market activity has come off its August lows, it is still relatively limited and struggling to build momentum.”
Richard Pike, Phoebus Software sales and marketing director, said: “Good news at the beginning of the year comes from the Bank of England in the form of increased approvals towards the end of 2016. There still appears to be an appetite to buy or remortgage despite all the uncertainty that has come over the last year.
“As we head into a new year, and further changes come into effect for buy-to-let, it is difficult to predict how the overall market may be affected. Nevertheless the consistent low interest rates and new deals from lenders is likely to keep the rest of the market buoyant, at least until March when the next wave of economic uncertainty comes in the form of Article 50.”
Economists believe that house price growth is likely to weaken in 2017 as increasing economic uncertainty weighs down on consumer confidence and willingness to engage in major transactions such as buying a property.
“Housing market activity and prices are also likely to be pressurized by stretched house prices to earnings ratios and tight checking of prospective mortgage borrowers by lenders,” said Archer.
“However, the downside for house prices will be limited markedly by a shortage of houses for sale. On balance, we suspect that house prices will be essentially flat over 2017. Indeed, we believe that a small drop in house prices in 2017 is just as likely to occur as a small rise,” he added.
