Mortgage lending has reached it’s highest level for 6 years after statistics from the British Bankers Association showed there was a 52% rise in mortgage loans.
In April 12.2bn was lent in mortgages, this is the highest since 2008 and comes despite there being a fall in the number of mortgages being approved.
As house prices continue to rise mortgage lending has also been forced to increase to keep up with the demand within the housing market.
Mortgage Lending & Approvals
This largest sector to see a rise in mortgage approvals has been house purchases, which over the past year rose 25%. This is compared to re-mortgaging which grew just 6% during the same period and others which fell -12%.
Over the past year there’s also been a 0.7% rise in mortgage stock.
Housing Price Inflation
In April the Halifax announced there was a 8.7% rise in house prices which took housing inflation to it’s highest rate since October 2007.
Nationwide also said housing price inflation grew by 10.9% as government schemes, improved economy and employment increasing all take effect.
Despite the continued rise in house prices some are claiming the increase has slowed in the previous quarter in comparison to the months prior.
Howard Archer, IHS Global Insight chief UK and European Economist said,
“The dip in prices in March reported by the Halifax adds to some tentative signs that that a little bit of froth may be coming off the housing market – although it is still robust,”
Mortgage Approvals Fall
The British Banking Association also found there was a drop in the number of mortgages approved during April, making it the third consecutive fall.
The figures show the number of mortgage approved dropped from 45,045 in March to 42,173 in April, despite 48,000 being approved in January.
Although it’s unclear the exact reason from the drop in mortgage approvals, many believe it’s due to new lending criteria being introduced.
Mortgage Market Review (MMR) wasn’t officially introduced until the end of April however many lenders began using it early.