The increase in total net lending to individuals in December (£2.2 billion) was higher than the November increase, but below the previous six-month average. The twelve-month growth rate slowed further, to 3.6%, and the three-month annualised growth rate ticked up by 0.2 percentage points to 1.5%.
Within the total, the increase in net lending secured on property (£1.9 billion) was higher than the November increase and the previous six-month average. The number of loans approved for house purchase (31,000) was higher than in November, whilst that for remortgaging (36,000) was lower than in November and that for ‘other purposes’ (32,000) was the same as in November. Approvals for each purpose were lower than their previous six-month average.
Commenting on the mortgage approvals data, RICS chief economist Simon Rubinsohn said: "The pick-up in activity reflects in part the increased interest from buyers who are being attracted to the market by both the fall in house prices and drop in mortgage rates. Interestingly, the increased supply of mortgage finance in December came exclusively from banks while both building societies and other lenders remained on the sidelines.
"The RICS New Buyer Enquiries series suggests that mortgage approvals could rise a little further over the coming months but more mortgage finance is urgently needed to help meet this demand. The likely introduction of 'mortgage guarantees' in April should go some way to help address this issue."
