Mortgage approvals on the rise

Mortgage 11

Mortgage approvals in the UK are continuing to increase, according to the latest industry figures, which reveal that more house completions are taking place.

The Halifax House Price Index shows that the volume of mortgage approvals for house purchases, which is a leading indicator of completed house sales, increased by one per cent between November and December 2016.

In total, 67,900 approvals were made, which is the highest level since March 2016, when approvals were boosted ahead of the increase in stamp duty on second homes and buy to let properties in April.

An even greater increase was observed across the quarter, with approvals from October to December being nine per cent higher than in Q3 2016. The figures indicate that sales of new homes could rise further over the coming months as interest and activity continues to rise.

House prices rise

The report also reveals that there has been an increase in the average price of a UK property, with selling prices for the three months between November 2016 and January 2017 being 2.4 per cent higher than in the previous three-month period from August to October 2016.

This was largely consistent with the 2.5 per cent quarterly rate of change in the three months to December, which was the highest since March 2016; a further indication that the slight fluctuation in the market witnessed in April has now been recovered.

On an annual basis, the increase in house prices is even greater, with home values in the three months to January being 5.7 per cent higher than in the same three months a year earlier. This followed December’s 6.5 per cent and came after two consecutive increases in the annual rate.

FTB numbers increasing

According to the recent Halifax First-Time Buyer Review, the number of first-time buyers is estimated to have risen by seven per cent in 2016 to a total of 335,750.

This is the highest level since 2007, when the total stood at 359,900, and suggests that record-breaking mortgage deals, the Help to Buy scheme and other offers on deposit contributions are encouraging more people to step foot on the property ladder.

Martin Ellis, Halifax housing economist, said the quarterly and annual rates of house price growth remain robust, with “exceptionally low” interest rates being a major factor, and that this is unlikely to change as the year progresses.

Mortgage deals

It comes after figures compiled by Moneyfacts revealed that the best rates on a range of mortgages are currently being offered by building societies, rather than banks.

A range of offers are enticing new buyers onto the market, with one stand-out finding being the potential savings on a five-year 75 per cent LTV fixed-rate deal, where the average building society deal is 2.34 per cent - 0.66 per cent lower than the average bank deal of three per cent.

On average, the report found that many families could be £100 or more a month better off by opting for a building society mortgage rather than one from a bank, which could result in a new raft of deals entering the market as banks aim to hit back.

Use our mortgage calculator, created with the Mortgage Advice Bureau, to work out the best deal for you.