The number of mortgages approved in April increased 9.9%, the highest monthly rise for six years according to the Bank of England.

Mortgage approvals for April increased by 6,131 to 68,075, the highest monthly figure for the past 14 months and the largest monthly increase since the beginning of 2009.

The 68,075 of new mortgages for April was 11.9% lower than the peak of 75,791 reached in January 2014 according to the bank of England.

The average loan size is £170,000, £11,000 more than the average from 2 years ago increasing pressure on first time buyers, home movers and buy-to-let landlords.

Demand still high for homes

Mortgages are still on the rise due to recent surveys suggesting that lots more people want to buy a house.

Help with the deposit for first time buyers can come from family members as the equity release buyer can access cash using a lifetime mortgage and give to a child or grandchild.

It has been predicted that all housing market activity will improve given that the market has settled down after the decisive victory for the Conservatives in the general election.

Howard Archer of IHS Global Insight says house prices are set to rise by 6% in 2015 5% in 2016. There is an upside risk to this forecast coming from the current lack of properties coming on to the market.

Housing market activity will continue to improve amid generally supportive fundamentals and reduced uncertainty following the general election.

Meanwhile a shortage of properties coming on to the market is currently exerting upward pressure on house prices.

For new purchases when prices are rising, buy-to-let landlords would require a larger deposit and mortgage to buy and higher rental income to cover the interest costs.

There may be fewer suitable homes on the market as the equity release mortgage buyer can avoid downsizing to access money from their home for home and garden improvements, holidays of a lifetime or pay for care at home.

In May, £10bn was loaned in mortgages and mortgage debt rose by £1.1bn to £793.6bn including first time buyers, home movers and remortgage buyers, buy-to-let landlords.

Other debts rising

There has also been a rise in borrowing through credit cards, personal loans and overdrafts of 5% in the year to May, the highest it’s been since autumn 2010.

The debt that the nation owes in loans is almost £36bn with £41bn being owed on credit cards. The BBA, however, take this positively and say it is a sign of “improved credit availability and stronger household finances.”

Increased consumer confidence has also been demonstrated year after year, since every year our overall consumer debt has risen by £4.5bn.

It is likely this will push up the number of mortgage applications, due to the wealth effect making people more inclined towards buying a house.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as buy a more expensive home or reduce inheritance tax owed by your beneficiaries.

Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.

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