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Pre-election surge in UK home loans

By Ashley Norris

Mortgage approvals soared to a three year high in November

Analysts have been surprised by a sudden surge in UK mortgage approvals.

November 2019 saw more homebuyers secure loans than they have in any month in the last three years.

UK banks agreed to 43,715 mortgages, up from 41,312 in October and the highest total since January 2017.

The data from UK Finance also highlighted that mortgage approvals in November were 6.8 per cent higher than a year ago. Remortgate approvals also rose, up by 12.7 per cent.

Dr Howard Archer, chief economic advisor to the EY Item Club, said that this was a “significant surprise,” but suggested that fears of a new UK government meant that homeowners might have become keen to push deals through.

“Indeed, the housing market had clearly been pressurised over the previous three months by a potent cocktail of Brexit, economic and domestic political uncertainties. It is also notable that while consumers have benefited from markedly improved earnings growth and rising employment over much of 2019, these fundamentals reached a peak around June/July in terms of employment and earnings growth," he said.

Andrew Montlake, managing director of mortgage broker Coreco, agreed, saying “for a lot of British households, November was a classic case of better the devil you know. They chose to get their houses in order and secure a mortgage before a potentially disruptive election result.”

While mortgages surged, UK Finance figures underlined once again how November had been a tricky month for retailers. Credit card spending was just £10.9bn in November, which is a drop of 3.3 per cent compared to 2018. The Office for National Statistics reported that retail sales fell by 0.6 per cent in November compared with October.

Meanwhile UK Finance said personal borrowing through loans was up 3.6 per cent and overdraft borrowing down 0.8 per cent year on year.

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