New Mortgage loan approvals for UK home buyers have hit a six-year high, the latest figures from the Bank of England reveal.
According to the Bank of England, there were 76,947 new mortgage approvals in January, suggesting home sales will keep growing in the coming months as home prices throughout London and much of the UK continue to ascend.
The latest figures show that January marked the largest number of mortgage approvals in over six years, when the real estate market peaked prior to the banking crisis.
Mortgage approvals are traditionally viewed as a strong indicator of future trends, and the data suggests that home sales will continue rising in future months.
UK home sales eclipsed one million in 2018, a substantial jump of 15 percent over 2012 home sales.
Last year also marked the first time since 2007 that such a high level of sales has taken place in a single year.
“Approvals have been going up quite strongly for the past year,” said John Charcol’s Ray Boulger.
“I think gross mortgage lending in the first quarter of the year will be up considerably on last year, by at least 35 percent, but for the rest of the year, the increase will be more modest,” he continued.
However, Boulger predicts home price will increase by 8 percent nationally throughout 2018, which is certainly a strong revival.
After trudging along for five years since the onset of the banking crisis and the crippling mortgage rationing that followed, the UK property has been in full swing since last spring.
The recent increase in mortgage lending, home sales, construction, and home prices, however, is largely due to more relaxed lending standards and a huge cash injection.
In 2012, the BOE officially launched its controversial Funding for Lending Scheme, which provided banks with cheap cash to lend to both businesses and personal customers.
Then, the UK government launched two more schemes under the “Help to Buy” banner, making it easier for people to secure a home loan by only having to put down 5 percent for a down payment.
While many believe the Help to Buy Scheme is largely responsible for spurring the recent upswing in the property market, the market’s increased activity has also been stimulated by an improving overall economy and higher levels of employment.