Bank of England figures show confidence returning to housing market

New figures suggest confidence in the housing market has returned after the Brexit vote and is filtering through to produce higher levels of mortgage approvals.

The Bank of England reports that the number of mortgage approvals for house purchases in September reached a three-month high of 62,932, worth £11.1bn, after falling in the summer months. This was up from 60,984 in August, which was a 19-month low when total lending was £10.4bn.

However, lending remains below the levels seen in the same period last year, down 9.6% on September 2015’s figure of 69,619 and is below the six-month average of 64,841, though the figures were higher than expected.

The figures point to the market picking up after property purchasers adopted a ‘wait and see’ approach in the aftermath of the Brexit vote towards buying a new home or remortgaging.

The rise in mortgage approvals may have also been helped by the Bank of England’s decision to cut the base rate to 0.25% in August.

There was also an increase in the number of remortgages, suggesting that borrowers have decided to take advantage of the low rate deals available to secure a new mortgage deal.

The number of remortgage approvals in September went up to 42,440, above the six-month average of 41,882.

Scott Bowman, UK economist at Capital Economics, said the figures suggested that “the housing market is stabilising and appetite for debt hasn’t taken much of a hit following the Brexit vote”.

Howard Archer, chief economist at IHS Global Insight, said: “The September Bank of England mortgage approvals data tie in with other indications that housing market activity has edged off its recent lows, helped by the current resilience of the economy.

“With housing market activity seemingly coming modestly off its recent lows and the economy currently resilient, house prices could well edge a little higher in the near term.

“However, we suspect that house prices will come under increasing pressure as 2017 progresses and may dip modestly over the year, possibly by around 3%.”

The figures tie-in with other data that points to an improvement in the housing market. RICS has reported that buyer enquiries went up in September for the first time since February