Housebuilders' share prices rose today after figures from the Bank of England showed that in January mortgage approvals hit the highest level since February 2016.
The Bank reported a 2.4 per cent month-on-month rise in January, bringing the number of mortgages to 69,928.
Read more: UK house prices rose by just £600 last month
This represented a year-on-year fall of 3.9 per cent in mortgage approvals, but investors were still pleased with the news. At time of writing:
- Persimmon's share price was up 4.5 per cent
- Taylor Wimpey's share price was up 2.81 per cent
- Barratt Developments' share price was up 2.64 per cent
- Berkeley Group's share price was up two per cent.
Russ Mould, investment director at AJ Bell, said that even if the headline number only stay level in the coming months, this would lead to year-on-year growth of between five per cent and eight per cent by the second quarter of this year.
"Shareholders in the UK housebuilders may like to take some reassurance from the latest bunch of data, following a spell where changes to stamp duty land tax added to the property market's fears over Brexit and consumer confidence, despite the creation of the Help to Buy ISA and Lifetime ISA, both of which are designed to help first-time buyers," Mould said.