The number of mortgages approved by the British Bankers’ Association in the three months to May rose from 32,952 (revised from 32,153) to a 16-month high of 36,102. The consensus was for a rise to 33,100.
Year-on-year, this was a significant jump of 24.1 per cent from 29,079 in May 2012. However, mortgage approval levels in May were just 66 per cent of the average monthly figure of 54,320 since 1997.
UK housing economist for Capital Economics Matthew Pointon puts the news into perspective.
BBA reports healthy rise in mortgage approvals in May, but net lending still contracting.— Matthew Pointon (@matpointon) June 25, 2013
Commenting, chief UK and European economist at IHS Global Insight Howard Archer said:
For the time being, we are sticking to our view that house prices will see solid but limited increases over the rest of 2013 and then strengthen more markedly in 2014. We believe that a strong upward move in house prices is unlikely for now given a still challenging and uncertain economic environment despite recent signs of improvement….
However, there is a growing possibility that with market activity now showing signs of gaining appreciable momentum, house prices could surprise on the upside over the second half of in 2013, especially as a shortage of new properties for sale is currently providing support to house prices in some areas, notably London and the South East.