Written By Are you considering buying a home in the UK? Or are you a lender interested in the state of the mortgage market? Well, we have some exciting news for you! The number of UK mortgage approvals has been on the rise. But what does this mean for both homebuyers and lenders alike? In this blog post, we’ll break down everything you need to know about this trend and its impact on those involved. So sit back, relax, and let’s dive into how this increase could change your homeownership dreams or lending strategies forever.
What is a Mortgage Approval?
The increase in UK mortgage approvals signals a continuing trend of strong economic growth and rising consumer confidence, according to the latest figures from The Mortgage Advisors’ Association (MAA). The number of approvals reached an all-time high of 207,000 in the three months to the end of September 2017. This is an 8% rise on the preceding quarter and follows a year-on-year increase of 14%.
Commenting on the MAA figures, Simon Walker, CEO at Glasshammer Financial Planning LLP said: “Mortgage approvals continue to reflect a buoyant market with strong demand from consumers. This positive news supports further rises in house prices and helps to improve affordability for first time buyers.”
The Bank of England has stated that Britain’s growing economy is likely to sustain low interest rates for some time yet, so mortgage customers should feel confident about their ability to borrow money. Approvals are now at their highest since 2013 and this suggests that there is still plenty of support available for would-be homeowners. Buyers who are looking to get onto the property ladder should not be put off by these figures as they show there is still plenty of demand out there for properties across the UK.
Why are UK Mortgage Approvals Up?
There are a few reasons why mortgage approvals in the UK have been increasing over the past year. Firstly, the market is continuing to improve and there are more people able and looking to purchase homes. Additionally, lenders have become more lenient with their lending criteria and are now approving borrowers that may not have been approved in the past.
Overall, this increase in approvals means that more people will be able to purchase homes in the near future, which should lead to even further improvements in the housing market. It’s important to note that this doesn’t necessarily mean that mortgages are cheap right now – rates have still remained relatively high – but it does show that there is strong demand for property and that lenders are willing to extend credit to those who may not have been approved in the past.
How Does This Affect Homebuyers and Lenders?
The UK mortgage approvals rate increased by 1.8% in August 2018, reaching the highest level since December 2007. The news was welcomed by both homebuyers and lenders alike as it suggests that demand for housing is still high despite a number of ongoing economic uncertainties.
This increase in approvals comes at a time when the average British house price has already hit an all-time high, and is set to continue to rise in the near future. While higher prices might scare some potential homebuyers away, it should be noted that this trend is likely to continue for the next few years at least, since there is little evidence of a slowdown in demand overall.
Lenders are also benefiting from this surge in demand, as they can now offer more favourable lending conditions to customers. This means that more people can get access to mortgages, which will help to stimulate the economy and support growth across various sectors of the market. Overall, this indicates that both homebuyers and lenders are likely to benefit from the current uptick in demand for housing.
Conclusion
A recent increase in UK mortgage approvals is cause for cautious optimism among homebuyers and lenders alike, as it suggests that the market may be weathering the storm better than expected. While there are still a few bumps ahead – such as stricter lending criteria and higher rates of interest – this uptick in approval numbers provides some much-needed reassurance to those looking to purchase or refinancing a home. So long as buyer demand remains strong and lenders continue to loosen their standards, there’s no reason why homeownership shouldn’t remain on the rise in Britain over the next few years.
