MORTGAGE APPROVALS INCREASE

Mortgage approvals increased in July to hit their highest level since February 2014. Driven by elevated confidence and record-low home loan offers, new Bank of England data reveals nearly £1bn more was lent out for purchases compared to May. Net mortgage lending surged by £2.709bn in July, the biggest increase since July 2008. Lending for house purchases hit 68,764, up on the 67,069 recorded in June and the 64,971 seen in May. Approvals are up 16.4% from last November, when they hit a year and a half low of 59,100. Bank of England data shows that more homeowners are choosing to remortgage ahead of potential base rate rises, with 38,042 remortgage deals worth a combined £6.4bn taken out in July, up from 36,348 in May. Brian Murphy, head of lending at Mortgage Advice Bureau, said: "Bargain basement mortgage rates are attracting borrowers in their droves, and many are keen to lock into record low pricing before interest rates rise". The Daily Mail says the data signals a housing market which is beginning to heat up, with Howard Archer, chief economist at IHS Global Insight, saying: “We suspect that housing market activity will be supported over the coming months by largely helpful fundamentals, notably including stronger earnings growth, high employment, elevated consumer confidence and still very low mortgage interest rates,” with limited housing stock driving prices upward.