A doubling in mortgage approvals sounds like yet more evidence that the housing market mini-boom will continue. But stats released by the British Bankers Association (BBA) this morning also indicate it could be running out of steam.
The number of loans approved almost doubled from 21,361 in October 2007 to 42,238 now. The value of loans approved more than doubled from £2,783m to £6,075m. That’s impressive growth and lenders seem to be more relaxed about handing out bigger mortgages too - the average value of a loan for house purchase is up 10% since last October and 22% so far this year.
What’s more, approvals will show an even bigger improvement on a year ago next month since they reached their lowest point in November 2008.
However, the figures also show that most of the doubling in approvals happened up to mid summer and that there has been a marked slowdown since then. In the eight months between November 2008 and July 2009, the number of approvals rose 123%. In the three months since the increase is just 4%.
This month’s total may be almost double that of October 2007 but it is also the second lowest October total recorded by the BBA since it started releasing the stats in 1997 and was barely changed on September.
What’s happening with approvals tends to feed through into house prices a few months later, which suggests the mini-boom will start to run out by the end of the year.
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