Mortgage approvals on the rise - housing transactions expected to hit one million mark by end of year, says EY ITEM Club
30 April 2013
Nida Ali, economic advisor to the EY ITEM Club, comments on today’s lending figures:
- An encouraging set of figures for the housing market
- Funding for Lending Scheme (FLS) and Help to Buy (HTB) address the UK’s housing market weakness on both the supply and demand fronts
- This should allow housing transactions to continue firming up through the year, leading to a pickup in house price growth
“An encouraging set of figures for the housing market, with mortgage approvals rising robustly in March. It corroborates our view that the Funding for Lending Scheme (FLS) is providing support to mortgage activity, both by improving access to finance and reducing its cost.
“The full impact of the initial phase of FLS is yet to feed through and, factoring in last week’s extension as well, we should see further improvements in mortgage availability. This will be nicely complemented by the government’s encouraging initiatives under the ‘Help to Buy’ scheme, aimed at boosting housing demand.
“Activity is likely to continue building and we’re expecting the number of transactions to hit the million mark this year for the first time since 2007. This should be sufficient to generate a steady acceleration in house price growth over the next couple of years.”