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Mortgage approvals given January boost

 Mortgage approvals given January boost

Category: Mortgages

Updated: 29/02/2012
First Published: 29/02/2012

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Mortgage approvals hit a two-year high in January, Bank of England figures have revealed.

The number of house buyers who saw their mortgage applications accepted last month rose by 7% to 58,728.

Over the last six months, the average number of mortgage approvals has been 52,839.

It is the highest monthly Bank of England figure recorded since December 2009, while the number is a 30% increase on the same month last year.

The mortgage market appears to have been boosted by a number of first time buyers completing their mortgage deals before the end of the stamp duty holiday.

Up until 24 March, first time buyers are exempt from paying a 1% levy on house purchases worth up to £250,000.

Separate figures from the Building Societies Association (BSA) also support the theory the first time buyers are inflating mortgage activity.

The group reported a 32% rise in gross mortgage lending in January, up to £1.9 billion from £1.4 billion in January 2011.

Another £1.7 billion of mortgages were approved, a rise of 54% from the same point last year.

"New lending and approvals for house purchase picked up across the market in January, perhaps in part due to first-time buyers taking advantage of the stamp duty holiday before it ends in March," said Adrian Coles, director-general of the BSA.

"Lending activity by mutuals was up significantly in January compared to the same month last year, continuing the trend of increased lending by the mutual sector seen throughout 2011."

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