Business

Mortgage approvals jump to two-year high

UK high street banks approved the largest number of mortgages for more than two years last month.

UK high street banks approved the largest number of mortgages for more than two years last month.

Trade association UK Finance said banks approved 42,989 mortgages in April, up 6 per cent from 40,564 in March and 11.5 per cent higher than a year earlier, on a seasonally adjusted basis.

Remortgaging approvals rose 5 per cent to 31,152 between March and April and were 11 per cent higher year-on-year.

But the figures also show that growth in overall net lending - gross lending less redemptions - slowed to £1.8 billion in April from £2.4 billion in March.

Gross mortgage lending also eased back by 1.4 per cent to £20.3bn year-on-year.

Property market experts said the figures suggest resilience in the face of Brexit uncertainty and come after the sector saw a sharp slowdown ahead of the original Brexit deadline.

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: "Home purchase approvals, which are the most important element of these figures, were strongly higher in April but reflect a rather up and down period for the market.

"Nevertheless, it is a positive and once again demand proves to be more resilient, which it should be at this time of year."

Howard Archer, chief economic adviser to the EY Item Club, said the property market may have been boosted by the Brexit deadline delay.

"April's marked rise in mortgage approvals suggests that housing market activity may well have got at least some temporary support from the avoidance of a disruptive Brexit at the end of March," he said.

"It may very well also be that the housing market has benefited from recent improved consumer purchasing power and robust employment growth."

The UK Finance data also revealed that credit card lending surged by 11.7 per cent year-on-year to £11.4bn, not seasonally adjusted.

UK Finance said consumers were not saddling themselves with high credit card debts, but were instead choosing to use plastic more and pay off each month.

It said: "This growth in spending reflects consumers' increased preference for using credit cards as a means of payment, particularly online, because of purchase protection and card benefits.

"Repayments have remained in line with credit card spending, showing overall that consumers are managing their finances effectively."

Last week separate figures from UK Finance revealed how first-time buyers continue to drive the housing market in the north, with a 11.4 per cent increase reported in mortgage completions in the first quarter of the year, compared to the start of 2018. In all there were 2,440 first-time buyer mortgages completed in the first three months of 2019, while the number of new homeowner remortgages (2,820) in the same period was the highest in a decade.

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