REAL ESTATE NEWS: Mortgage approvals 'boosted by stamp duty change'
British Bankers’ Association members approved the highest number of mortgages in two years in January.
High street banks have reported a strong start to the year in the mortgage market, saying buy-to-let investors may be driving some of the growth as they try to complete ahead of higher stamp duty rates in April.
The number of mortgages approved by high street banks was up by a third year-on-year in January, with strong increases in both remortgaging and house purchasing, figures from the British Bankers’ Association show.
BBA members approved 80,285 mortgages during the month – the highest number for two years. Of these, 47,509 were approved for home purchases, an increase of 27% on the figure for January 2015, while remortgages were up by 42%, at 25,040.
The average value of loans approved for house purchase rose to £178,900 while the average remortgage grew to £181,800.
Gross mortgage lending was up by 38% year-on-year and reached its highest level since the middle of 2008, at £13.6bn.
Richard Woolhouse, chief economist at the BBA, said: “The start of the year has seen a significant rise in mortgage borrowing.
“It seems that this has been driven, in part, by borrowers looking to get ahead of the increases in stamp duty for buy-to-let and second-home buyers scheduled to come into effect in April.”
Estate agents have reported keen interest from property investors trying to buy ahead of the stamp duty changes, which will see the rate paid on second homes increased by three percentage points.
Howard Archer, chief UK economist at IHS Global Insight, said this could have an effect on prices. “This could well exert upward pressure on house prices in the near term,” he said. “Post-April, this move may modestly dilute housing market activity and upward pressure on prices.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said he expected mortgage approvals to remain on an upward trend.
(Source: The Guardian)