Mortgage lending 'hits accelerator' in April with biggest monthly surge in approvals for more than six years
- Bank of England reports lending surge in April
- Comes after mortgage approvals dipped because of MMR changes
- One economist says activity will improve following general election result
Mortgage approvals jumped by the largest monthly amount in more than six years in April according to latest data from the Bank of England.
It showed 68,076 mortgages for house purchase with a total value of £11.1billion received the green light over the month. This is up from 61,945 in March, the strongest monthly jump in the number since February 2009 and the highest number recorded since February 2014.
The boom comes after a lending slowdown seen since April 2014, when stricter lending rules were put in place in the form of the Mortgage Market Review.
Mortgage boom: Bank of England figures show lending was up 10% on a month in April
MMR means lenders have to probe potential borrowers finances far more stringently and apply tough stress tests in the event of rates rising in the future.
In the six months previous to April 2015, the average number of mortgages approved had slipped to 60,679.
The latest figures in the Bank of England's money and credit report adds to evidence the housing market is beginning to pick up once more.
Many mortgage lenders have slashed their loan rates to the lowest levels they have ever offered.
For instance, Yorkshire Building Society launched a two-year fix with a rate of just 1.07 per cent at the end of May.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said: 'Today's data shows the mortgage market finally hit the accelerator in April with the highest number of loans approved since February 2014.
'A ten per cent monthly jump in mortgage approvals is the biggest for over two years and an encouraging sign for consumers that there is plenty of life left in the mortgage market.'
Howard Archer, chief economist at IHS Global Insight, said: 'We suspect that housing market activity will continue to improve amid generally supportive fundamentals and will benefit from reduced uncertainty following the decisive general election result.'
Huge boost: The number of approvals jumped in April as mortgage lending surged
The number of remortgage approvals also picked up in April, as borrowers take advantage of cheap rates.
There were 35,930 remortgage loans with a total value of £5.9billion approved, compared with an average of just over 32,000 approvals recorded over the previous six months.
Yesterday, data from the Land Registry showed an overall fall in housing market activity. In the period between November 2014 to February 2015, sales volumes averaged 64,196 transactions per month.
This is a decrease from the same period a year earlier, when sales volumes averaged 73,156 per month.
But the Bank of England figures suggest that activity came back to life in April - and this may be reflected in the next set of Land Registry data.
The Land Registry data also showed the average house price grew 0.9 per cent between March and April to reach £179,817 in England and Wales – just £1,200 off the peak recorded in 2007.
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