Mortgage approvals have the wind of low borrowing rates in their sails and have stormed to a five-month high.
The number of mortgage approvals jumped to 37,305 in February, up from 36,517 in January. A bit of context is revealing: they are still 20 per cent lower than in February 2014.
What is more, approvals are recovering from a 20-month low in December, which IHS Global Insight analyst Howard Archer believes is significant. Archer said:
...the fact that mortgage approvals continued to trend down to be at a 20-month low in December 2014 - after lenders had got to grips with the new mortgage regulations - pointed to a clear, marked underlying moderation in housing market activity.
Richard Woolhouse, chief economist at the British Bankers’ Association, said the surge is likely the result of the recovery taking hold and buyers feeling more confident in the purchase of larger items, such as houses and cars, driven on by low borrowing rates.
The increase in mortgage approvals is welcome news and a sign that the housing market is beginning to improve. We’re seeing stronger demand for mortgages as consumers take advantage of some of the very competitive deals currently available.
Demand for loans and other types of personal borrowing is rising at its fastest rate since the financial crisis. Consumers are feeling increasingly confident about buying big ticket items, such as cars or home improvements, as the recovery really begins to take hold.
The data came out at a similar time to Office for National Statistics house price figures for January, which showed prices moderating. The data from the ONS is delayed so the result of higher mortgage approvals will be keenly awaited in next month's ONS figures.