Further evidence that the pick-up in buyer interest in the housing market is feeding through into actual activity is evident in the latest mortgage approvals data from the Bank of England.
According to the BoE, the number of mortgages sanctioned in February climbed to the best level since May 2008. Commenting on the data, Simon Rubinsohn, chief economist with the Royal Institute of Chartered Surveyors (RICS) said: “This reflects in no small measure the improvement in affordability in the wake of the 20% drop in house prices and the sharp reduction in borrowing costs.
“Even so, accessibility to the market still remains a problem with many first time buyers struggling to find the necessary deposit to compensate for the much reduced loan to value ratios now being offered by lenders. While it is likely that the numbers of mortgages being approved will continue to edge upwards over the coming months, the level of activity will still remain low by historical standards. The fact that transactions have bounced off the bottom hasn’t reduced the need for the government to take further steps to enhance the flow of mortgage finance.”