Mortgage figures indicate market recovery underway
Fresh evidence that the housing market recovery is underway emerged today with the news that mortgage approvals rose by 2.4% in April 2013.
The British Bankers Association reported that mortgage approvals increased to 32,153 from 31,401 in March, although the latest figure still remains well below the monthly average of 54,403 approvals seen since 1997.
The BBA also said that increased numbers of people continued to pay off their mortgages in April, with a net repayment during the month of £241 million.
The organisation said the government's Funding for Lending scheme continues to support the market, with first-time buyers in particular benefiting in the short-term.
Adrian Anderson, director of mortgage broker Anderson Harris, said: "Borrowers continue to overpay on their mortgages, taking advantage of record low interest rates, and pay down debt where they can.
"This makes sense - why leave savings languishing in accounts paying such poor rates of interest when you can reduce your borrowing instead?"
He also said there is a reluctance to take on extra borrowing because of the uncertain economic and jobs climate, and warned that the historically low level of housing market activity means optimism has not yet fully returned to the market.
"The numbers demonstrate that we remain some way off a sustained recovery in the housing market as caution continues to prevail," Anderson said.
In mid-May, the a survey of estate agents by the Royal Institution of Chartered Surveyors showed that demand for property rose to a three-year high in April 2013. Anderson said these increased enquiries could lead to improved official figures in coming months.
Lea Karasavvas, managing director of independent mortgage broker, Prolific Mortgage Finance, said the BBA figures proved there was "without doubt more momentum in the market. The market today is vastly different to the one of two to three years ago. It feels considerably more stable.
"Lower inflation and further confirmation that the economy grew in the first quarter will add to the sense of confidence. Improved confidence and lower rates, especially at higher loan-to-values, have been the catalyst of the mortgage and property markets. Ever-growing numbers of first-time buyers are injecting life into the market as a whole."
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.