It was predicted that mortgage approvals would see a rise after the election result was known, and this has indeed happened. The mortgage approvals agreed in May rose by approximately 4% compared to the same time a year ago.
2015 has turned out to be a good year in terms of mortgage approvals. Each month so far has been an improvement on the month before. This time we saw a total of 42,530 approvals throughout May, which was an increase of 510 when compared to the number of approvals achieved in April. These figures were reported by the British Bankers’ Association (BBA).
The election effect
It was believed some people were hanging back on getting a mortgage until we knew which party would be in power after the election. The uncertainty leading up to the election meant the market experienced a degree of hesitation as people hung back to see what happened.
However this was not the only element that had an effect on how well the market performed. We have reported in the past about the competitiveness in the mortgage market at the moment. This too has had an effect and encouraged many to move home and secure a low interest rate on their mortgage at the same time.
Increased confidence can also be seen elsewhere
The British Bankers’ Association also confirmed that unsecured borrowing was looking up. The general trend has been increasing since 2012, proving that people are becoming more confident about their financial outlook.
Low interest rates have influenced lenders to provide some of the lowest-priced mortgages in history. However those rates have also led to an increase in unsecured borrowing at low rates, not to mention a drop in the amount people are putting away for the future.
At present there looks to be little chance of anything changing. The deals the banks and building societies are coming up with mean people have a chance to get on the housing ladder or move up at a low cost. No doubt lots more people will grab a mortgage while the rates are this low. The headline rates have dropped below 1% but even those above that level are competitive and provide individuals with a chance to find a mortgage deal that is fixed for several years.
A big change
It is quite surprising to look back just a few months to reports that were issued at the very start of this year. Just five months ago there was a fall in mortgage approvals that led many in the industry to worry about the immediate future for the housing market. However as we can see here, things are now very different.
It does however show how quickly things can change. It also makes us wonder whether there will be another change before the end of the year, or whether we can look forward to more rises in mortgage approvals as the second half of the year starts to take shape.