London, England, United Kingdom (4E) – The number of mortgage approvals in the UK climbed to its highest level in five and a half years in September, according to a Bank of England (BOE) report released Tuesday in London, further sign that the improving property market has been boosted by government measures.
New home loans approved in September were 66,735, an increase from 63,396 in the previous month and the highest level since February 2008, according to the BOE. Home-loan rates declined to a record low, and gross mortgage lending reached 15.6bn pounds ($25bn), the highest level since October of 2008.
Mortgage approvals in September surpassed estimates of economists, who called for a 66,000 gain based on the median of 23 estimates in a Bloomberg News survey. Consumer credit climbed 411 million pounds in September and net mortgage lending increased 1.03 billion pounds, the BOE said.
The latest result suggests initiatives by the government to spur mortgage lending and boost greater activity in the housing market are generating results.
To boost mortgage lending, the government and the central bank have introduced a number of steps like an affordable funding program for lenders and taxpayer guarantees for borrowers that do not have sufficient cash to place a large downpayment. Critics, however, caution that these initiates may risk starting a new property price bubble.