Figures released by the Bank of England showed that the monthly number of mortgage approvals rose in November to 60,518, surpassing the forecast rise to 58,000. The number of approvals has now increased steadily for the past twelve consecutive months.

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Analysis of the figures by the centre for economics and business research found that total net lending to individuals rose by £1.1 billion in November, 2009, following the £0.5 billion increase seen in October. However, the twelve month growth rate remained at 0.7 per cent, the lowest rate since comparable records began.

House Price Latest: Mortgage Approvals Increase

The growth in lending is being driven by rises in secured lending with mortgage approvals up in November.

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RICS senior economist Oliver Gilmartin believes that the Bank of England figures support the view that increasing momentum in the housing market will see further rises in house prices during early 2010.

“Mortgage approvals have now been rising consistently for a year and the latest credit conditions survey from the Bank of England continues to suggest a gradual improvement in the lending environment over the coming months,” he said.

“Lenders reported an increase in credit availability for borrowers with loan to value ratios above 75% in Q4 2009 whilst the maximum loan to value ratio rose for the first time in over 2 years.”

Despite an expected increase in property coming onto the market in 2010, Gilmartin stressed that the current imbalance between demand and supply was set to underpin further price gains in the near term.

Crucially, as the housing market begins to bounce back and the economy comes out of recession RICS believe that interest rates will begin to rise in the second half of 2010.

“Significantly, the standard variable mortgage rate will be moving off a low base (currently more than 40% below historic norms) meaning that small movements in interest rates have a bigger proportional impact on monthly payments.”

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