The number of approvals for remortgaging was 35,930, compared to the average of 32,308 over the previous six months. The number of approvals for other purposes was 10,623, compared to the average of 9,404 over the previous six months.
Also in the report were the data on lending secured on dwellings increased by £1.7 billion in April, compared to the average monthly increase of £1.8 billion over the previous six months.Gross lending secured on dwellings was £17.1 billion and repayments were £15.0 billion.
Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments: “One year after the Mortgage Market Review (MMR), today’s Bank of England’s data suggests there is much greater confidence in the mortgage market, with all types of mortgage approvals during April considerably above the average for the previous six months. Total approvals are also up 9% compared to last April, suggesting the market is adjusting back to normal now that the MMR has bedded in.
Remortgage approvals have risen at twice the rate of house purchase approvals over the past year, despite tougher affordability checks which some feared would imprison consumers in their existing deals. Falling mortgage rates have boosted demand in the remortgage sector, and there are significant savings to be had for borrowers moving away from their lender’s standard variable rate (SVR).
With the election clearly having little impact on mortgage activity, the outlook for the rest of 2015 remains positive. Lenders have a healthy appetite for business, and affordability conditions are being helped by the low rate environment. However, today’s rock-bottom prices can’t last forever and it is likely we’ll see greater levels of mortgage activity as borrowers seek to lock into a preferable rate while they still can.”
Peter Williams, Executive Director of the Intermediary Mortgage Lenders Association (IMLA), had this to say: “Today’s Bank of England data shows the mortgage market finally hit the accelerator in April with the highest number of loans approved since February 2014. A ten percent monthly jump in mortgage approvals is the biggest for over two years and an encouraging sign for consumers that there is plenty of life left in the mortgage market.
Lenders have been forced to batten down the hatches over the last year to adapt to new regulations.
With the Mortgage Credit Directive (MCD) on the horizon, we are still caught in the eye of the regulatory storm – so it is reassuring to see that more people are being approved for loans than at any point since the Mortgage Market Review (MMR) rules took effect. In particular, the rush of remortgaging proves that existing borrowers are still able to switch loan under the new affordability regime.
Lenders are working hard behind the scenes to prepare the ground for the MCD and ensure the transition is as smooth as can be hoped for in practice, so there is every prospect for modest but sustained growth in the second half of this year.”
Peter Rollings, CEO of Marsh & Parsons, comments: “The mortgage market has pulled through the winter stupor, and jumped into action with an impressive upwards leap in April. Lending is starting to stretch out its limbs, as banks and borrowers alike are finally starting to fully understand last year’s MMR changes and navigate them effectively.
In addition, the election affect can be overstated. Households who had been steadily saving for a deposit and lining up to buy weren’t going to suddenly park their aspirations while politicians debated theirs. Despite the question marks hanging over the property market at the time, the biggest unknowns were for the million-pound levels of the market, and for many buyers, low mortgage rates and reduced stamp duty made it worth their while to keep moving.
Now that the new government has nailed its colours to the mast and made commitments to bolster housebuilding, demand will be further galvanized at all rungs of the ladder and we’ve already seen a significant upswing in buyer registrations in May. Lending is now streaks ahead of a year ago, and with buyer confidence also leading the pack, the only way looks to be up.”
Richard Pike, Phoebus Software sales and marketing director, said: “After a few months of a fairly stagnant market the figures announced this morning by the Bank of England, showing a 10% increase in month on month approvals, are very encouraging. Many predicted the lull before the election but it appears as though there were other factors that encouraged people to move or get onto the property ladder even before election uncertainty was removed.
With all things considered: stamp duty, help-to-buy, low interest rates, higher LTVs and lenders once again willing to lend; the market is ripe for growth. If further predictions for the year are to be believed then we are now in for a more buoyant period, which seems most likely.”
