House purchase approvals were higher than last month and 3% higher than in April 2014, possibly influenced by the introduction of the Land and Buildings Transaction Tax in Scotland.
Gross mortgage borrowing in April was £10.5 billion – 13% lower than in the same month last year but 2% higher than in March. Although seeing slower demand in the second half of 2014, the overall mortgage stock is now 1.0% higher than a year ago.
Remortgaging and other approvals also increased in April and are some 6% higher and 7% lower respectively than a year ago.
Richard Woolhouse, Chief Economist at the BBA, said:
“British businesses and consumers have started to put their foot on the gas. There appears to be broad confidence about the economy, which the banks are supporting through affordable credit, leading to rises in borrowing across the board.
“Business lending has risen in three of the first four months this year indicating that we might have reached a turning point. There was a significant pre-election jump in mortgage approvals which we would expect to continue in the coming months.
“There was a sharp rise in the amount savers deposited in their bank accounts and also in the amount people are borrowing through personal loans and credit cards. This suggests that consumer spending will continue to drive the British economy forwards.”
Adrian Gill, director of Your Move and Reeds Rains estate agents, comments:
“The resilience of the mortgage market has broken through the cloud cover, and lending is thriving again. Importantly, this growth is also shining down on first-time buyers, as demand for borrowing at the bottom of the market weathered the approaching General Election storms. Smaller up-front stamp duty costs, and rock-bottom mortgage rates kept borrowing moving, and the road ahead looks clear for an even busier summer.
“But as house prices continue to climb, buyers are playing a constant game of catch-up – with sluggish saving rates and stagnant salaries still holding back many households from owning their own home. The majority of initiatives under the coalition honed in on stimulating first-timer demand at the bottom of the market, but this narrow focus ignores the gaping shortage of homes available to buy at all tiers of the market. Yesterday’s Housing Bill shows the new government adopting a broader vision, and starting to fight the housing crisis on the supply front too. But it will take a lot more than 200,000 starter homes to balance out supply and demand in the housing market, and keep property prices on a sensible track.”
