The number of approved mortgages in the UK has significantly hit its highest yet in over five years in August and may rise even more due to a scheme proposed by government for October.
According to official data from the Bank of England that was released on September 30, approved mortgage deals for residential real estate rose to their highest level to date in five years last August. The official tally is 62,226 – the largest number in mortgages the country has seen since February of 2008. Analysts believe this number will rise even more in the next few months because of a new scheme that the government has proposed, which is due to start in October.
During the last weekend of September, British Prime Minister David Cameron hastened the launching of the mortgage guarantee initiative, which will be supported by the government. Meanwhile, some analysts think the scheme may fuel a housing bubble; a belief that certainly worries many people.
Supported by a recovering economy as well as various government programmes that encourage lending for both firms and individual consumers, the housing market in Great Britain has certainly shown sure signs of improvement. As proof of a rising demand in the market, residential real estate prices in Wales and England have climbed up. In fact, according to a recently released survey, the two countries recorded their biggest gain in the market over six years for the month of September.
In addition to that, analysts believe that the Help to Buy programme recently launched by the government will probably increase further the demand for residential real estate. Economist David Tinsley from BNP Paribas said, “The government’s announcement that the Help to Buy mortgage indemnity scheme will start three months early will probably give further upward momentum in coming months.”
The Help to Buy programme aims to help people who are unable to afford a mortgage deposit on a house. According to the government, they will supply about GBP12 billion for the programme to encourage borrowers to apply for mortgage loans that may be up to 95% of the total value of the properties being sold in the market. Due to the programme, analysts predict that estimates for approved mortgages could be around 70,000 to 75,000 by the end of 2013.
During the last week of September, Chancellor of the Exchequer George Osborne has asked the UK’s Central Bank to help out with making sure that the said government programme wouldn’t cause a housing bubble.
In other related news, Prime Minister David Cameron declared that two of the Big Four in the UK, namely the Royal Bank of Scotland and Lloyds, would participate in the Help to Buy programme and that other major British banks are also considering to join in. For more information, visit http://www.regus.co.uk/customer-service/contact-us.aspx