A pre-Boris bounce? Housing market revival began BEFORE the General Election as the number of mortgage approvals hit two year high
- Net mortgage borrowing grew by some £400million to £4.6billion in December
- Number of approvals also grew, hitting their highest levels in two years
- Vast majority of borrowing undertaken before Tory election win
- January figures expected to see even bigger ‘Boris bounce’
Homebuyers were undeterred by the political uncertainty of the General Election in December as new data suggests a housing market revival in the last month of the year.
Figures from the Bank of England show that the number of mortgages approved last month jumped to its highest level in over two years, despite claims at the time that the election was having a freezing effect on the number of transactions.
The figures suggest a precursor to the ‘Boris Bounce’ described by estate agents in the weeks following the election, which saw an uptick in the number of buyers and sellers coming to market.
Net mortgage borrowing grew to £4.6billion in December, some £400million more than the average for the previous six months, according to the Bank’s Money and Credit report.
Homebuyers were undeterred by the political uncertainty of the general election in December
Approvals for house purchases, which are an indicator for future borrowing, rose to 67,200, above the 65,900 average seen in the previous six months.
Estate agent Jeremy Leaf said: ‘Mortgage approvals are a useful indicator of the direction of travel for the housing market and particularly from such a widely respected source.
‘Buyer confidence has been returning since before the election and irrespective of Brexit, and January’s figures will almost certainly confirm that trend.’
According to the most recent report from Nationwide a ‘modest pick-up’ in the property market saw house prices climb 0.5 per cent in January – adding £615 to the cost of the average home.
In its first full month’s report since the Election, Britain’s biggest building society said cheap mortgages and a ‘healthy labour market’ helped boost Britain’s housing market in January.
Prices: Average property prices across the UK, according to Nationwide’s recent report
In the year to January, average property prices rose by 1.9 per cent, marking a 14-month high for house price inflation.
Buyers can now expect to fork out around £215,897 for a home, but Nationwide poured cold water on talk of a sizeable Boris bounce for the housing market and forecast a ‘broadly flat’ year ahead for property values.
This is in line with most economists who have predicted a steady 2 per cent rise in house prices over the course of the year.