The UK housing market has shown an impressive amount of improvement recently, with May seeing more mortgage approvals than expected. This is according to new data from the Bank of England (BoE), which suggests that activity might be perking up again after a relatively slow 2017.
Growth in both purchases and house prices slowed down significantly in 2017, and the first few months of 2018 showed no sign of this trend reversing. However, the latest figures hint that things could be speeding up again, as the number of approved mortgages hit a four-month high.
In total, 64,526 mortgages were approved in May, up from 62,941 in April; an increase of just over 2.5 per cent. Not only is this an impressive boost, it is also a much better performance than expected. A Reuters poll of economists predicted that the market would continue to slow, with mortgage growth slowing to around 62,000 approvals.
Alongside this, the number of approvals for remortgaging also increased, to 50,979 from the 47,295 approved in April. This equates to growth of around eight per cent, and is the highest number of remortgaging approvals seen since November 2017.
In total, the amount lent as part of mortgages increased by £3.9 billion. This is a rise of 0.3 per cent compared to April. The total value of mortgages has been growing at a steady rate for several months now, and May's figures do not mark a significant change in this regard.
However, while all this news is positive for the property sector, there are reasons to be cautious. The prospect of Britain leaving the EU - which is scheduled to occur in just nine months - has led to a downturn in consumer confidence. A recent survey revealed that Britons in general are more downbeat about the economic prospects of Brexit.
While current data shows the housing market seems to be on the up, economists warn that this could only be temporary. The months leading up to Brexit - and whatever deal is agreed with the EU - could have negative effects on this industry in the near future.