Mortgage Approval Rates In The UK Highest Since 2009
28 Jan 2020
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- A total of 982,286 applications for mortgage loans were approved in 2019.
- This figure is also the highest since 2009 when mortgage loan approvals amounted to 986,742 applications.
- Experts believe the jump in approval rates comes mostly from the fall in mortgage rates during the second half of 2019.
According to reported figures, the number of applications for mortgage loans approved in 2019 by reputed banks in the UK was the highest in the last 10 years. This is congruent with reports of a strengthening housing market in the UK following improved investor confidence.
Economists are of the opinion that low mortgage rates have contributed immensely to increased activity in the housing market, as has already been proven earlier by a UK Finance report, and a further increase in activity should be expected due to a higher rate of mortgage loan approvals, especially after the December elections.
According to the report released by UK Finance, a total of 982,286 applications for mortgage loans were approved in 2019, which is 7.4% higher compared to figures reported a year prior. This figure is also the highest since 2009 when mortgage loan approvals amounted to 986,742 applications.
Further bifurcation of these numbers has revealed that 507,789 mortgage loan approvals were given for applications to purchase a house, the highest in this category since the year 2015. Among these, 46,815 approvals were handed out in the month of December alone, which is the highest total in a single month since the month of August in 2015.
Experts believe the jump in approval rates comes mostly from the fall in mortgage rates during the second half of 2019. A further boost in approval rates is still expected to come due to the impact of the December elections
, as there exist procedural delays between filing a mortgage application and receiving an approval decision, usually of about two weeks, and further delays caused due to the Christmas holidays. This impact, according to experts, will be felt in figures reported for the month of January.
Generally, the financial health of the average Briton seems to be improving as well. According to UK Finance, the annual growth rate of credit card debt reported in December was 2.4%, much lower compared to the 6.6% rate reported in October 2016. Deposits in personal savings accounts also increased by approximately 2.5% till December 2019 for the year, with around 75% of such deposits being maintained in easy-access accounts.