Boost in mortgage approvals a sign of improving housing market

House prices rising 1The recent fall in property prices could be having a positive effect on the property market as the number of mortgage approvals in February rise a faster than expected rate.

According to the British Bankers’ Association (BBA) new mortgage approvals in February increased to 37,305, up from the January figure of 36,517. According some analysts a lower increase of 36,900 had been expected.

These figures are contrary to Council for Mortgage Lenders figures which showed a fall in the number of new mortgage approvals.

However, the rise is still below the average of 37,764 approvals in the six months prior to February, but there are encouraging signs that the housing market is livening up.

Richard Woolhouse, Chief Economist at the BBA, said: “The increase in mortgage approvals is welcome news and a sign that the housing market is beginning to improve. We’re seeing stronger demand for mortgages as consumers take advantage of some of the very competitive deals currently available.

“Demand for loans and other types of personal borrowing is rising at its fastest rate since the financial crisis. Consumers are feeling increasingly confident about buying big ticket items, such as cars or home improvements, as the recovery really begins to take hold. Personal deposits grew very slowly as alternative savings vehicles remain attractive, particularly the new pensioner bond.”

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