Mortgage lending in the UK is on the rise. In August lenders approved the greatest number mortgages in over a year and a half.
According to recent data released by the Bank of England, mortgage lending recorded the greatest net increase since May 2008. In August the total number of mortgage approvals was 71,030, up from 69,010 the previous month.
The figures show that the UK housing market is picking up after the slight slowdown last year when stricter mortgage lending laws were introduced.
Monthly mortgage approvals was declining for most of 2014 which fueled concerns of a housing market bubble.
However, so far this year approvals have picked up (in all but two months) and property prices are increasing at a faster rate compared to 2014.
The Bank of England’s Financial Policy Committee said last week that house price inflation will likely pick up over the next few months.
Howard Archer, economist at IHS Global Insight, said the data provided “more compelling evidence that housing market activity is on the up”, adding: “Stronger buy-to-let activity is also pushing up mortgage approvals.”
Archer expects property prices to end this year up 7 percent and climb up a further 6% next year.
He said: “Higher interest rates are unlikely to have a major dampening impact on housing activity for some time to come, as the Bank of England is stressing that interest rates will only rise gradually and to a limited extent.”
The BoE also said that total net mortgage lending increased by £3.4 billion in August, compared with the £2.8 billion rise in July.