The Bank of England ‘Trends in Lending’ report issued yesterday confirmed the strong improvement in mortgage approvals to purchase property.
What was interesting, however, was not the most recent data (which had been issued earlier in the Bank’s regular Money and Credit report), but the historical data going back to 2007 (see table below). Immediately before the onset of the ‘credit crunch’ mortgage approvals were running at comfortably above 100,000 a month. Even if approvals reached 75,000 a month in December or get to around that level in January, mortgage approvals will still be 25% or more below their level before the recession hit.
Don’t get me wrong. The improvement in mortgage lending is genuine and significant. But it’s not at a level that would suggest boom times are here again. And with new powers to limit mortgage lending, the Bank is sure to step in to prevent that happening.