Mortgage approvals increase in January

The number of new mortgage approvals increased in January, suggesting that the recent interest rate rises have done little to dampen demand from house buyers.

A study by the Bank of England showed that new mortgage approvals rose by 6,000 to 120,000 in January. Mortgage approvals are seen as a good indicator of short-term trends in the property market.

December saw a sharp fall in approvals, which some commentators said was evidence of a reaction to interest rate rises in the housing market.

However, the increase in figures in January suggests that house buyers have not been put off by the increased cost in mortgages.

David Stubbs, of the Royal Institution of Chartered Surveyors, said: “The strong economic growth and rising employment, enjoyed by the UK at present, is supporting housing demand, even in the face of recent increases in interest rates.”

The total value of all new mortgage approvals – including re-mortgaging – came to £32.2bn.

This made January’s mortgage figures the second-highest since records began.

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