UK house prices: Mortgage lending rose unexpectedly in December
The rush to sneak that house purchase in before interest rates rise continues apace: figures published by the Bank of England this morning showed mortgage lending jumped unexpectedly in December, beating analysts' expectations.
Mortgage lending for house purchases rose to 70,837 in December, up from 70,424 in November. That was against analysts' expectations of a modest fall, to 69,600.
The figure is the highest since the 70,933 loans reported in August last year, which itself was at a 19-month high. It seems hysteria over house-buying is unlikely to die down.
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"It does appear that housing market activity is being lifted at the moment by buy-to-let investors looking to make a purchase before April's rise in Stamp Duty for the sector," said Howard Archer, chief UK and European economist at IHS Economics.
"In last November’s Autumn Statement, Chancellor George Osborne imposed a three per cent surcharge on Stamp Duty on purchases of buy-to-let properties and second homes from April 2016. This could well exert upward pressure on house prices in the near term. Post April, this move may modestly dilute housing market activity and upward pressure on prices."
Meanwhile, non buy-to-let-ers are also contributing, as they attempt to secure mortgages before the interest rate rises
"Buyer interest seems likely to be supported by largely helpful fundamentals, notably including decent real earnings growth, high and rising employment, relatively elevated consumer confidence and ongoing very low mortgage interest rates," added Archer.
"Indeed, the increased likelihood that interest rates may not rise until at least the fourth quarter of 2016 could very well give a boost to housing market activity. We believe earnings growth will pick up as 2016 progresses, despite a recent relapse."