Mortgage approvals dip in January, but up by 32 percent on year-on-year basis: BBA |
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Tue, 28 Feb 2006 14:05
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LONDON - The number of mortgage approvals dropped in January as compared with December last year, but was still 32 percent above what was approved in January last year, according to the latest report released by the British Bankers’ Association.
The number of mortgage approvals in January was 45,039 as compared to 51,233 in December 2005. However this figure was still 32 percent above what was recorded at the same time last year. Mortgage approvals are the number of loans that have been agreed to but have not yet been paid out.
This seems to confirm the belief that the housing market is definitely on the rebound. The BBA said that a total of 140,020 mortgages were approved last month, a collective value of £12.7 billion as compared to 140,866 valued at £13.4 billion in December. ”Seasonally adjusted net mortgage lending fell back to around the recent trend in January and the level of approvals, in particular for equity withdrawal, held up well in what is traditionally a slow month," said David Dooks, the BBA's director of statistics.
"Whilst credit card lending continued to be subdued, consistent with the current weakness in retail sales, lending on loans and overdrafts was stronger than of late, with a greater use being made of overdrafts.” Despite the slip up in approvals, analysts remained confident that the housing market was in good health and was shaping up nicely for the rest of the year. “Continuing evidence of robust housing market activity further reduces the chances of a near-term interest rate cut, as it will reinforce rising Bank of England concern that lower interest rates could excessively stimulate the market and increase the risk of house prices moving sharply higher," said Howard Archer, the chief UK economist at Global Insight.
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