With some commentators predicting a fall in house prices this year, Bank of England figures have revealed that mortgage approvals soared to a three-year high in November 2006 as UK purchasers made their saving and investment in property.
Around 129,000 new homeloans were approved for house purchases in November, totalling £9.8bn, the second highest figure on record behind September 2003, when just under £10bn was advanced.
Many observers said that this pointed to the likelihood of a robust property market in 2007, with continued house price rises and a strong demand for properties, especially in hotspots like London, the South East and Northern Ireland.
With housing still a scarce commodity, the consensus is that prices will continue to rise if the UK economy holds firm and saving and investment are maintained at current levels.
The Bank of England also pointed to a slowing rate of personal debt, although the amount now owed by UK citizens stands at £1.278 trillion, with £1.066 trillion held in the form of mortgages.
The remaining £212bn is represented by credit card borrowers, bank loans, hire purchase agreements and overdrafts, which offsets the saving and investment made by people.
“Consumer credit – that is, debt that is not accounted for by mortgages – is rising at its slowest rate since the figures were first published in 1994,” said a Bank of England spokesperson.