Mortgage Approvals

Mortgage approvals are the essence of the housing market. When they dropped of the edge of a cliff, as they did in autumn 2007, the credit crunch took hold; the housing market took a complete nose dive. From peak to trough Mortgage approvals were down by a horrendous 80%.
They began a sustained rise in December 2008, with numbers doubling by November of last year.

2009, this was unexpected, a dive in the economy alongside a recovery in the housing market!

The Bank of England tell us that Mortgage approvals have broken their upward run, sliding from 60,045 in November to 59,023 in December. The figures are seasonally adjusted; we did have worse weather than usual in January which will probably affect those figures also.

Continually rising approvals are part of the recovery process. The centre of Economics and Business research, predicts that prices will rise by more than 6% this year and by a total of 20% by the end of 2013. For this to occur, approvals need to continue to rise, to 72,000 per month by the years end and 90,000 by 2013.

The collapse of approvals followed the demise of the wholesale markets, in which lenders raised funding from investing institutions. Lloyds Banking group, quite recently raised over £2 billion, mostly from investors in the states, after a £4 billion fundraiser last autumn. It is still early days to state whether the incline in mortgage approvals is over.

House prices increased by 0.6% in January, according to the Halifax, The average UK home costs £169,777 which is 9.9% above the low recorded in April last year.

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