UK mortgage loans at a 20 month peak

UK MORTGAGE approvals rose in November to their highest level since March 2008 as confidence trickles back into the property market, Bank of England figures showed yesterday.

Loan approvals numbered 60,518 over the month, rising from an upwardly-revised 57,718 in October and more than double the record low of 27,162 set in November 2008. The figure comfortably beat analyst forecasts of 58,000.

Net mortgage lending in November rose by £1.5bn, significantly above both October’s £1.1bn rise and the previous six-month average of £700m.

George Buckley, chief UK economist at Deutsche Bank, said the figures were low compared to pre-crisis levels but that “the tide looks to be turning”.

However, he was quick to caution that the economic recovery is far from set in stone, adding: “ The durability of the recovery will remain an issue going forward given that much of the improvement in growth could be down to the credit impulse and the turn in the inventory cycle – both of which could prove short-lived.”

Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said: “Today’s figures support our view that increasing momentum in the housing market will see further rises in house prices during early 2010… Despite an expected increase in property listings and the onset of several headwinds during 2010, the current imbalance between demand and supply is set to underpin further price gains in the near term.”

The mortgage data came as another survey predicted that activity in the prime property sector is set to pick up this year following a deluge of top-end homes coming onto the market.

Property portal said yesterday 21.8 per cent of potential sellers in the South East region alone had yet to appoint an agent to market their home, indicating a boost to supply in the near future.