UK mortgage approvals rise 6% in 2015, BBA reveals

UK mortgage approvals in 2015 rose 6% compared to a year ago to £137.8bn, according to data on Wednesday.

The British Bankers’ Association said mortgage approvals in December, including loans for house purchases and remortgaging, in December jumped 24% to 75,745 at a total value of £12.4bn.

Loans for house purchases in December rose 19% year-on-year to 43,975 but it was lower than the previous month’s 44,533 approvals in November and analysts’ expectations for 45,500 approvals. Remortgaging increased 31% to 23,764 approvals following 23,523 approvals in November. Approvals on other secured borrowing rose to 8,005 in December from 7,916 in November.

Credit card purchases fell 3% in December from a year ago to 262 million at a total value of £13.7bn.

“It seems that consumers were less reliant on credit cards to fund purchases last month despite Christmas shopping and seasonal sales,” said Richard Wollhouse, chief economist at the BBA.

Companies’ net borrowing dropped £2.7bn in December, reflecting falls in construction, manufacturing, wholesale and retail sectors.

Pantheon chief UK economist Samuel Tombs said the outlook for mortgage lending remains positive.

"A net balance of +15 lenders reported to the Bank of England’s fourth quarter Credit Conditions Survey that they intend to increase the supply of secured credit over the next three months," Tombs said.

"Mortgage rates look likely to edge down further in response to the recent fall back in swap rates. Meanwhile, the still-strong level of consumer confidence and households' lofty expectations for house price growth suggest mortgage demand is set to strengthen. As a result, we still think that activity and prices will see strong upward momentum in 2016."