UK Mortgage Approvals Hit 14-Month High

The report, published by the Bank of England on Wednesday, July 29th showed that UK mortgage lending hit a 14-month high last month, which fact in its turn suggests that British property market is starting to show signs of improvement despite low activity and restricted lending.
The number of mortgages approved for homeowners in June 2009 reached as much as 47,584 – this figure is the largest since April 2008 and is 3,415 higher than in May 2009. Meanwhile, net mortgage lending increased by £300 million – the figure is the same as in May and 30% of April net mortgage lending gain.
Mr. Paul Samter, Council of Mortgage Lenders’ economist is determined that the prospects of the property market in the UK are still gloomy because of the lending industry limits and worsening unemployment across the country. He added that the official figures revealed by the Bank of England prove the predictions of a slow recovery.
Meanwhile, Capital Economics’ economist, Mrs. Vicky Redwood, believes that the figures published by the Central Bank suggest that the activity on the country’s property market is back on track. However, she acknowledges the fact that the market is still in a poor conditions as the improvement that has been seen only helped the market to rise from the exceptionally low level it reached since the beginning of the credit crunch.
Global Insight economists, particularly Mr. Howard Archer, are being more skeptical about the figures revealed by the BOE, highlighting that the number of mortgages approved in June 2009 barely exceeds 50% of the monthly average (93,400) seen annually since 1993. He added that a mortgage market is considered consistent with rising house prices only if the number of mortgage approvals rises above 70,000. Therefore, in the opinion of Mr. Archer, the UK property market will remain muted in the near future because of restricted lending and poor economic conditions.
Last Thursday, July 23rd, The British Building Societies Association, claimed that gross mortgage lending reached £1.98 million last month, while the British Bankers’ Association (BBA) said that loans approved for property purchase amounted to £4.7 billion.