UK Mortgage at 21 Month High

The Bank of England announced that after compiling the numbers that December was the highest month for loan approvals in 21 months, making it a high point for the $6 trillion industry. The central bank adjusted for seasonal swings, and showed that approvals rose from 116,000 in November to 122,000 in December, exceeding the median estimate of 115,000 and the six month average of 106,000. Surveys from two of the major UK lenders said that house prices are reviving after the fizzle toward the end of 2005. Hopefully this rebound will result in higher consumer spending and a stronger European economy for 2006. The numbers are consistent with previous peaks, making everyone hopeful that the forecasts will be good in the year to come.

Accordingly, the pound rose against the dollar to $1.7736 on Tuesday, while the interest-rate future maturing rate rose to 4.59, indicating that investors don’t expect the benchmark interest rate to fall. Housing prices rose by 1.4% in January, following the seven month trend. Forecast for a stronger market over the next few months is seen as a result of the continued pickup of mortgage approvals.