Mortgage approvals rise in September and bond investors look sanguine ahead of tomorrow’s budget
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The increase in mortgage approvals last month shows that the housing market is “reviving” and will continue to improve over the next year, says Thomas Pugh, economist at audit, tax and consulting firm RSM UK.
Pugh says:
All the factors which are contributing to the broader economic recovery are also positive for the housing market. Lower inflation, higher household incomes, lower interest rates and, until recently at least, recovering consumer confidence will all help to drive housing transactions and prices higher.
The effective interest rate on newly drawn mortgages decreased by 8 basis points, to 4.76% in September. And with house prices still about 2% below the record highs seen in the summer of 2022, there is plenty of room for growth to catch up. We’re expecting annual price rises of between 4% and 5% by the end of the year.
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