Three year high on UK mortgage approvals

The recent figures released by the Bank of England have indicated that mortgage approvals in the UK are now at their highest levels in around three years, showing a healthy mortgage market despite rising property prices and interest rates. Nearly one hundred and thirty thousand mortgage approvals took place in November 2006, and this was the highest number of approvals since 2003 according to reports.

And with nearly ten billion pounds approved for mortgage applicants during that month this is said to be the second highest figure on record. The highest was ten billion pounds, and this was in September 2003. According to some experts in the field, the strong figures indicate that the mortgage market will remain strong this year, but some have concerns that the market will have to cool at some point.

One analyst stated: "We suspect that with so many people stretched to the limit in buying a house, even a modestly small cumulative rise in interest rates will ultimately have a substantial dampening impact on housing market activity." With three interest rate rises already having taken place since August last year, many consumers are already feeling the financial strain, with the interest rate now up from four and a half percent before August 2006 to five and a quarter percent.

In addition to these figures it also looks as though consumer debt is slowing down in the UK, with just over one and a quarter trillion owed by consumers in the UK, out of which the majority is owed in the form of mortgage debt. Recent reports with regards to consumers in debt in the UK have sown more responsibility in the use of credit cards. The growth level of consumer debt in November 2006 stood at half the growth level seen in 2005 according to banking figures.

Alisdair Milton
1st January 2007

 

More Information:

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• Why Does The Interest Rate Of Your Mortgage Change?
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• The True Cost Of Your Mortgage
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