Mortgage approvals point to renewed housing strength
Saturday 30 December 2006
The housing market looks set for a robust start to the new year after figures yesterday showed a sharp jump in the number of mortgages approved by the main lending banks last month.
The British Bankers' Association said 77,788 people reserved a loan to buy a home in November, up almost 4 per cent on October and more than 9 per cent ahead of last year.
Mortgage approvals tend to point to the movement in house prices several weeks ahead when the money is used to complete the house purchase.
"The strength of mortgage approvals indicates that August's interest rate rise had little immediate cooling effects on the housing market," said Howard Archer, chief UK economist at Global Insight.
The BBA also revised up its initial estimate of underlying new mortgage lending to £6.7bn from what was already a record high of £6.5bn.
David Dooks, head of statistics at the BBA, said: "The high number of loans approved in November, which is not usually a strong month, suggests that the trend in mortgage lending will continue to be robust over the next few months."
The figures support other data depicting a resilient housing market after two interest rate rises this year and with economists expecting higher borrowing costs next year.
On Thursday, the Nationwide building society house price index showed prices rising at their fastest annual rate in two years.
Separate figures yesterday showed homeowners borrowed more against the value of their homes in the three months to September. Mortgage equity withdrawal rose to £11.8bn in this quarter from a downwardly revised £11bn in the second. This lifted it to 5.4 per cent of post-tax income from 5.1 per cent in the second quarter and a low of 3.1 per cent in early 2005. Nevertheless, it is well below the peaks of around 9 per cent of post-tax income seen in 2003.
The data record the difference between borrowing secured against housing and an estimate of what has been spent to improve the housing stock. The big issue for the Bank of England is whether the money is being used to boost savings, which will have little impact on inflation, or to fund a festive spending spree.
"Few numbers are as misunderstood as these," said Malcolm Barr at JP Morgan. "The extent to which a solid housing market is an effect of forces also supporting spending versus a cause of higher spending remains a big area of debate."
The new year is unlikely to bring any relief for first-time buyers (FTB) struggling to get a foot on the property ladder. The average price paid by an FTB broke through the £150,000 barrier for the first time this year, according to research by Halifax.
The average price increased by 11 per cent in 2006 to £151,565 from £137,122 in 2005. The average house price paid by an FTB has risen by 95 per cent from £77,914 in 2001.
Halifax calculated that a typical FTB was unable to buy an average house in 93 per cent of towns in 2006. The least affordable placewas Gerrards Cross in Buckinghamshire, where the average property price was 16.7 times the average income of an FTB household.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Is it time to turn your back on Isas?
The ticking bomb of Generation Y
Lending price war erupts – this time for real
How to start your own internet business
The whole truth about legal fees: Conveyancing can knock a big hole in home-buyers' finances. To get the best deal you must cross-examine solicitors about their charges, says Sue Fieldman
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
- 4 Man stabbed with Legend of Zelda Master Sword in serious condition
- 5 Study suggests that 'gaydars' are real - at least for women
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
iJobs Money & Business
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...
£30000 - £40000 per annum + benefits: Pro-Recruitment Group: Personal Tax, FTS...
Day In a Page
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew