Although house purchase mortgage approvals dropped in 2016, mortgage values rose to the highest level since 2008, figures suggest.
Data from the British Bankers’ Association (BBA) for December show that banks approved 43,228 mortgages last month, up from 41,003 in November, but down by 4.1% on an annual basis.
Meanwhile, estimates on mortgage values from the Council of Mortgage Lenders (CML) claim that gross mortgage borrowing reached £20.4 billion in December. Although this is 4% lower than November’s figure, it takes the total mortgage values of 2016 to a post-2008 high of £246 billion.
An Economist at the CML, Mohammad Jamei, says: “The UK housing market, much like the wider UK economy, ended 2016 on a generally positive note.
“Approvals for house purchase have recovered strongly of late, and this should feed through to lending figures in the early months of 2017.”
He continues: “The current availability of mortgage credit is benign, and the real issue continues to be a dearth of properties on the market, which adds to the challenges facing would-be buyers.
“Uncertainty associated with political factors and prospective changes to the tax treatment of landlords will weigh on prospects for the year ahead.”
The Chief Executive of haart estate agent, Paul Smith, also comments: “The surge of housing purchase approvals seen in December suggests the New Year should be off to a flying start, so long as the industry does not get run off track by being bogged down with the ins and outs of Brexit negotiations.
“The upcoming Housing White Paper has the potential to uplift this, however, the bungling over its release date does not inspire much confidence that we’re on the cusp of a homeownership revolution.”
He insists: “The Government needs to start listening to the voices within the property industry if we are to avoid leaving a generation of aspiring homeowners behind by inaction and policy failures.
“It is crucial that we see greater Government incentives for housebuilders to build the right type of housing, and for older people to downsize their family homes. Only then will we see the level of fluidity in the market needed to combat a growing population and a lack of supply.”
Smith’s pleas arrive as construction experts insist that the sector is experiencing a severe shortage of skilled workers, which will naturally impact housebuilding levels across the country.