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House purchase approvals rocket

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The number of house purchases has reached an 18-month high, data from the housing market has shown.

Figures from chartered surveyors e.surv showed a total of 72,712 house purchases were approved – the largest number since January 2014.

This figure was 12.8% higher than the 64,434 recorded in May and is the biggest month-on-month growth since February 2009.

The surveyors said this rise was due to confidence returning to the market following the general election.

Richard Sexton, director of e.surv, said: “This is the summer comeback we’ve been waiting for. Potential borrowers clearly paused their actions whilst the election came and went. But now borrowers are back in the market for mortgages and demand is stronger than ever.

“Interest rates have remained at record lows with a dovish outlook from the Bank of England’s Monetary Policy Committee, and we’re seeing a bevy of fixed-rate options as banks compete for buyers’ business.

“MMR has already tightened up the nuts and bolts, and lenders are now putting hands on deck to make sure they’re shipshape for the EU Mortgage Credit Directive peeking over next year’s horizon. More positivity among buyers and lenders alike means the market is now on a stable course of sustainable lending.”

There was also an increase in the number of high LTV borrowers – those with a deposit worth 15% or less of a properties’ value.

There were a total of 12,288 approvals for higher LTV house purchase loans in June, up 17.7% improvement on the previous month. These borrowers represented 16.9% of all house purchase approvals in June.

Sexton added: “It’s a clear case of growing confidence spreading beyond those already securely on the property ladder. Higher LTV borrowers – typically first-time buyers – are still reaping the benefits from initiatives like Help to Buy.

“But this significant increase in lending to borrowers with smaller deposits goes deeper than the various plans in place to help this group. It’s a sign that the nation’s finances are getting back in order, with wage growth starting to mount and an economy ready to shake off the doldrums and get back to work.”

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