mortgage approvalMortgage approvals performed strongly in July this year. In fact, they reached their highest level for over a year, since February 2014. It seems to indicate the market is looking healthier and it continues the trend of upward movements seen throughout much of this year so far.

 

The Bank of England published the figures this week, announcing that 68,764 mortgages were approved during the whole of July. This is much higher than the figures seen last November, when just 59,100 mortgages were approved. It makes a difference of 9,664 mortgages in total between those two months.

A recovering market?

It seems as though the housing market is bouncing back somewhat after the doldrums it found itself in throughout 2014. The Mortgage Market Review (MMR) that came into effect last year put a dampener on the housing market, with many homebuyers sitting back to wait and see what happened. Lenders had stricter rules to apply and this meant significant changes in the marketplace.

However it now looks as though the new rules have settled down a little. Furthermore the Bank of England is not looking to raise interest rates in the immediate future. Governor Mark Carney said the argument for raising the base rate would be determined more clearly by the end of 2015.

This could mean an interest rate rise will come in at the beginning of 2016, although it is still too early to tell whether or not that will be the case. Some experts are speculating whether or not there might be a rise in the more immediate future. This could even be before the current year is out.

Net mortgage lending also rises

This is usually lower than approvals, but the market still saw an increase in £2.709 billion in net lending in July. This was a huge increase – the biggest the market has seen in seven years to be exact.

With house prices still on the rise and many people looking to secure affordable mortgages at a time when interest rates are low, it calls into question what might happen when rates start to rise.

With so many changes happening throughout the mortgage and housing market, it is encouraging to get figures like these. One wonders how long it will last, and whether a rise in interest rates or a change in house prices could result in a very different outcome.

The European Mortgage Credit Directive rules (MCD) are also coming into force soon. This makes the immediate future uncertain in that respect as well. Few people can guess how these new rules might affect the housing market. These rules will affect lenders who provide mortgages. This might mean the market becomes a little more limited if lenders do not apply for permissions as laid down by the rules.

All in all the immediate future is uncertain, even on the back of the good mortgage figures released this month. It will be intriguing to see how the next few months pan out.

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