UK mortgage approvals rise for the first time in 6 months

UK mortgage approvals rise for the first time in 6 months

The number of people now able to get onto the property ladder has now started to rise for the first time in six months, according to the latest report released this week by the Bank of England. 

As the central bank has been surrounded by rumours early this year that it could damage the progress of the mortgage market in 2015 by increasing the base rate (expected in October), it said that the number of approvals has climbed for the first time in half a year. 

Data from the Bank of England shows mortgage approvals for house purchases numbered 60,275 in the last month of 2014, which was markedly up from the 58,956 in November. This will come as something of a surprise for the market, given the fact that December and January normally see a fall in the number of homes being bought and sold. 

However, the number of approvals did indeed rise throughout December, reversing the trend seen in the months before in which the volume of people getting the green light from lenders was falling. 

One reason for this happening might be the announcement in early December from the government that the way stamp duty is calculated was being changed. Chancellor George Osborne said that rather than people being charged one flat value based on the cost of their home, the tax would be calculated in the same way as income tax is, with only the portion of value above each threshold being charged the higher amount. 

It's a reality that will see the vast majority of people buying a home, especially those in the middle of the market, paying far less in stamp duty. What this means is that more people may have potentially looked to take advantage immediately, getting themselves onto the ladder for less. 

"As the market adjusts to these new measures this stranglehold has been loosened. There was an encouraging December uptick in mortgage approvals, as borrowing is once more starting to build up speed," Adrian Gill, director of Your Move and Reeds Rains estate agents, said.