Lender ‘pipeline’ sees home loans soar by a quarter
Monthly home loans have risen between December and January for the first time in twelve years, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.
The non-seasonally adjusted number of approvals rose 24%, from 52,619 in December 2013 to 65,142 in January 2014. It was the first time since 2002 in which the number of loans has increased between December and January, resulting in the strongest January for house purchase lending in seven years.
Two main factors were behind the seasonal anomaly. Lenders are pushing ahead with lending targets in advance of Mortgage Market Review regulations, due to be introduced on 26th April. The regulation will see tighter affordability checks come into play. Although most lenders are well prepared for the changes, they cannot ensure that all intermediaries are equally ready, and may therefore be aiming to get ahead of target as a precaution.
Sitting alongside this is an unprecedented demand for homes. The unemployment rate has fallen to 7.1%, which has spurred action as buyers look to confirm fixed-rate deals before any base rate rise comes into play. The result – non-seasonally adjusted approvals have jumped 75% compared to January 2013.
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