UK mortgage approvals hit three-month high

The number of mortgage approvals made to homebuyers hit a three-month high in September, but still lagged behind the average figure for the past six months. Bank of England figures showed that 62,932 mortgages, with a total value of £11.1 billion, were approved for house purchase in September, beating economists’ expectations of around 61,500.

The bounce-back comes after mortgage approvals fell in July, before hitting their lowest monthly figure since November 2014 in August. However, September’s rise failed to match up to the 64,841 loan approvals for house purchase over the past six months. Consumer credit edged down in September, showing a £1.4 billion increase after hitting a £1.6 billion rise in August. Within consumer credit, credit card lending rose by £0.5 billion in September, while other loans and advances increased by £0.9 billion.

Howard Archer, chief UK and European Economist at IHS Global Insight, said house prices could "edge a little higher in the near term" as housing market activity regains strength thanks to resilience in the UK economy.

However, he still expects house prices to “come under increasing pressure” throughout next year, dipping by around 3 per cent. “We believe housing market activity and prices will be increasingly pressurised in 2017 by heightened uncertainty and markedly deteriorating fundamentals for households,” he added. - (PA)