The number of mortgages approved for residential property purchases rose for the second consecutive month in October as the housing market recovered from a lull following the EU vote.
Fresh data from the Bank of England shows that 67,518 home loans were approved in October, up from 63,594 in September and the highest number since March.
The volume of mortgage approvals was ahead of the 65,000 expected by analysts in a Reuters poll and continued the improvement from the 61,381 home loans recorded in August.
Martin Beck, senior economic adviser to the EY ITEM Club, told the press: “Housing market activity faltered in the middle of the year, which is likely to reflect uncertainty surrounding the EU referendum and distortions caused by April's increase in stamp duty on second homes and buy-to-let properties.
“However, mortgage activity has recovered and is now at similar levels to those seen through much of 2015.”
Needless to say, the real test of the market will come in early 2017 when we will see whether or not these approvals have been translated into increases in sales,” according to north London estate agent, Jeremy Leaf.
He commented: “The figures are particularly welcome at this time of year when people have other things on their mind and we expect a slowdown in the run up to Christmas. We wait with anticipation as to how people will respond in the new year. However, even with the festive season almost upon us there is still a determination among many to get on with buying and selling at realistic price levels.”
The Bank of England’s data also shows that consumer credit surged in October, up £1.62bn, taking the annual growth rate to 10.5% - the strongest since October 2005.
But while the figures suggest that the slowdown in mortgage lending has bottomed out and that consumers’ remains undeterred by the outcome of the EU referendum, the data has prompted concern that some people could be getting into trouble with debt ahead of Christmas.