The last few months have seen some significant changes in the number of mortgages the market has approved. These changes were due to a variety of factors, all of which will be covered here. We will also see how the number of mortgage approvals rose in June, as confirmed by recent data. The election result in May led to greater confidence in June Aprils approvals were the highest they had been in around 14 months, as 68,051 mortgages were given the nod. This dropped predictably, perhaps to 64,826 in May. Uncertainty about the result of the election left many people watching and waiting to see the outcome. With the result known, June also predictably became a much more buoyant month. Indeed, approvals rose by 1,756 last month to hit a total of 66,582. The possibility of an imminent rise in interest rates There has been speculation regarding a rise in interest rates for some time now. Mark Carney, the Governor of the Bank of England, has previously warned on more than one occasion that interest rates are very likely to rise in the near future. While recent warnings have suggested the early months of 2016 as the likely time for this to happen, the most recent suggestions have pulled this back to the latter months of this year instead. Super-low deals still available This third element has combined with the other two to have many more potential homeowners and movers looking for a great deal on a new mortgage. We have noted the variety of mortgage deals available, many with a very low interest rate attached. Buyers are realising that locking themselves into a low-rate deal now could be the ideal time to do so, before rising interest rates kick back in. Consumer confidence is also buoyant While not directly associated with the UK mortgage market, credit card lending was also seen to rise last month. This usually means consumers are more confident about their financial position. This would also point to a healthier financial outlook overall, which could inspire more people to apply for a mortgage to move house or buy their first property while they can. All these elements have combined to give the housing market and mortgage market a boost in June. Whether it will last is another matter entirely. It will be intriguing to see when interest rates rise, whether they immediately lead to an increase in mortgage rates and how these factors affect the mortgage market. It would be reasonable to assume wed see a dip in the number of acceptances made, but until it happens we have no way to know for sure. The effect of the election has now passed though. As such this should not factor into the figures we will eventually see issued for July. At this point the threat of potentially-higher interest rates will be of more interest. We may see many more people making the most of the deals while they are still with us.
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