House purchase approvals, usually considered as a good indicator of further demands in the housing market, rose to 113,000. This figure is the highest since May 2004, causing speculation that the
property market is set to rise again.
Mortgage lending in the month of October rose above the increase projected by analysts, and above the 6 month average.
Lending during October climbed to 7.6 bln stg, superseding analyst predictions of 7.4 bln stg – the same figure as the six month average.
The figures further support other recent releases of information that indicate a healthy upswing in the housing market. However, some economists are urging caution about the limits of growth, due to the still-elevated
house price levels.
Total
mortgage approvals, including
remortgaging, also rose considerably - from 27 bln stg to 27.5 bln stg between September and October. This is the largest increase since September 2003. This evidence may lead to the
Bank of England continuing to hold
interest rates, after the cut in August.
However, despite these indications, many analysts doubt this recent activity will lead to sustained increases in
house prices. Record
debt, stretched affordability ratios and rising unemployment may provide a roof on consumer borrowing.
