Number of mortgage approvals to home buyers jumps to two-year high

The number of mortgages being approved to home buyers jumped to its highest level in over two years in December 2019, Bank of England figures show.

Some 67,241 loans for house purchase got the go ahead – marking the highest number since July 2017.

The Bank’s Money and Credit report also showed that annual growth in consumer credit, which includes borrowing on credit cards, personal loans and overdrafts, accelerated in December.

The annual growth rate of consumer credit increased to 6.1% in December, having ticked down to 5.9% in November.

Annual growth in consumer credit had stood at around 10.3% in 2017, before falling steadily.

Howard Archer, chief economic adviser at EY ITEM Club, said: “Mortgage approvals in December were highly likely significantly lifted by increased confidence and reduced uncertainties among housing market participants following the decisive General Election result.”

Speaking about consumers’ potential future spending behaviour, he said that while several surveys have pointed to consumer confidence getting a boost: “It remains to be seen if this improvement in confidence is sustained and whether or not it translates into greater willingness to spend.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics) said home buyer confidence had been returning since before the election.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics said: “Lower mortgage rates… have underpinned the recovery in house purchase mortgage approvals in December to their highest level for two-and-a-half years.

“With surveys suggesting that the mid-December election has triggered a further jump in new buyer demand, approvals will rise further (in the first quarter of 2020).”