The number of UK mortgage approvals has increased to a two year high in a surprise turnaround for the housing market at the end of 2011.
Loan approvals for house purchases in November last year were at their highest monthly level since December 2009, the Bank of England has revealed.
A total of 52,854 mortgages were approved in November compared to 52,786 in October. This is the highest monthly rise in almost two years, yet it does not mark a huge improvement for the housing market.
Mortgage approvals remain significantly below the 88,000 monthly average seen in 1993.
The number of remortgages is also at the lowest level since June last year and has continued to decline. The figure fell for a second month from 34,004 to 31,154.
Bank of England figures reveal that mortgage approvals reached the total value of £7.6 billion
Speaking to Sky News, Samuel Tombs of Capital Economics said the threat of a renewed credit crunch was likely to “weigh down on lending in the coming months.”
"We fear that approvals for new house purchases might soon start to fall as banks further restrict the availability and raise the price of credit in response to the deterioration in wholesale funding markets," added Tombs.
Mortgage approval guidelines are easing up for buyers, however, there are many additional costs that are involved in home ownership.
2011 saw house prices fall for six months, increase for a further five and remain unchanged for just one. The average price of a property is £160,063.
In addition to mixed house prices, homeowners can look forward to forking out increased stamp duty costs later this year. First time buyers will see the end of the stamp duty holiday on 24th March for properties up to £250,000 in value.
Home insurance is another cost which many may not have considered. Some mortgage lenders will make it a condition of the loan that building insurance is purchased.
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