mortgage approvalThe Bank of England has released data that indicates mortgage approvals reached a four-month high in January. This meant approvals rose for the second month in a row, moving up from the 60,349 in December to achieve a level of 60,786 in January. While this only amounted to a difference of 437 month-on-month, many have taken it as an encouraging sign. Indeed while the new housing rules last year approach their first anniversary, it would seem a raft of other conditions are ensuring people are still able to seek a mortgage.

Borrowing costs are dropping

We have reported several times recently on the ever-lower interest rates that are being attached to mortgage products in the marketplace at present. This fact too was borne out by the latest Bank of England data. The so-called effective interest rate fell sharply on new mortgages in January, in contrast to only a very slight drop against loans that are already outstanding. The former fell up 19 basis points, while the latter went down by just one basis point.

Is the housing market finally going steady?

It would appear this might be the case. House prices have on the whole increased by marginal amounts in recent months. However the most recent month has seen Nationwide Building Society note a small decline to reverse that trend.

Some have said the marginal movements to and fro that we’ve seen of late in the housing market are clear signs that the market is now bumping along the bottom. It may have dropped as far as it is going to go, and later on in 2015 we could start to see more encouraging signs of improvement.

Employment is healthier even though wages are still fairly stagnant

The picture in the world of employment has been more encouraging of late. This may have led to more people being more confident about their futures, thus leading them to look into the possibility of getting a mortgage. While wages have yet to rise significantly since the recession, many feel confident enough to consider applying for a mortgage.

Will the rise in mortgage approvals continue into next month?

No one knows. However the most encouraging sign is the raft of super-cheap mortgage products on the market today. These have largely only been seen coming into effect since the New Year, which means their effect will not be seen in this latest set of figures. Could we be in for a more encouraging month yet when the figures for February are released in a few weeks’ time? It is very possible, especially as the signs are that the Bank of England will not now consider raising interest rates until 2016.

With additional changes to Stamp Duty, which mean many people will pay less than they did before, home ownership is becoming more accessible to more people as we go deeper into 2015. While these figures are encouraging, they are but the beginning of a more in-depth story to be told.

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