Mortgage approvals up 19% in February

31 March 2009 / by Rebecca Sargent
The number of mortgage approvals for house purchase rose by 19 per cent in February, figures from the Bank of England have revealed.

The statistics show that the number of new mortgages approved in February stood at 37,937, a 19 per cent increase from the 31,791 that were given the go ahead in January.

The figures have sparked speculation that the market is on the up; however, head of mortgages at moneysupermarket.com, Louise Cuming, says that optimism should be treated with caution:

"This is undoubtedly good news and we should be cautiously optimistic about its implications for the housing market. People are being enticed on to the housing ladder by historically low rates and decreasing house prices.

"Indeed, moneysupermarket.com is seeing increased desire among borrowers to take advantage of the low fixed rates currently available. The fact that borrowers can buy the peace of mind that comes with knowing they can afford a mortgage for a specific period of time is certainly fuelling these early signs of recovery."

Economist at the Council of Mortgage Lenders (CML), Paul Samter mirrored this feeling, saying: "This is welcome news, but we will need a few more months' figures before we can say with any confidence that market conditions are showing a fundamental improvement.

"Transactions remain historically very weak, and this makes it harder than usual to adjust the figures for the normal upturn that happens in the spring."

And, according to the Royal Institution of Chartered Surveyors (RICS), the trend of increased mortgage approvals does not reduce the need for further financial stimulus from the Government, chief economist at RICS, Simon Rubinsohn said:

"The fact that transactions have bounced off the bottom hasn't reduced the need for the Government to take further steps to enhance the flow of mortgage finance."

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