6 More Reasons To Buy Barclays PLC, Persimmon plc And Barratt Developments Plc

I have long banged the drum about how increasingly-favourable lending conditions, combined with the broader effects of an improving UK economy on consumer confidence, should keep homebuying activity up and down the country ticking comfortable higher.

This view was given further credence this week when latest British Bankers’ Association (BBA) data showed mortgage approvals strike a 6-month peak in March, rising to 38,751 sign-offs from 37,453 in February.

Although last month’s result was down 14% from March of last year, the BBA noted that the number of approvals are gaining traction. Indeed, the body noted that “house purchase approvals are trending upwards as consumers take advantage of competitive prices in the mortgage market.”

Loans demand continues to lift off

Banking colossus Barclays (LSE: BARC) (NYSE: BCS.US) is one of the High Street institutions leaping on the bandwagon to make the most of Britons’ scramble to get onto the housing ladder.

The business has rolled out a steady stream of products to entice customers through its doors, and just last week introduced its fee-free, two-year rate locked at just 1.85%. It has also revamped its rewards programme this month, so customers who sign up to its Barclays Blue Rewards current account receive cashback if they also hold a mortgage with the bank.

Such measures have served Barclays well during the past year, and the business saw total mortgage lending leapt by 19.3% during 2014 to £20.3bn. Consequently the bank’s market share rose to 10.1% as of the close of last year, up from 9.7% in 2013.

Home prices heading higher again

But Barclays is not the only business making hay from resplendent conditions in the housing market, with Britain’s foremost homebuilders such as Persimmon (LSE: PSON) and Barratt Developments (LSE: BDEV) remaining extremely bullish over the strength of underlying long-term demand.

And with good reason: data from the Nationwide building society also released this week showed average house prices edge 1% higher in April, to £193,048 — this represented the biggest rise since last summer. And on an annual basis prices jumped 5.2%, up from 5.1% in March and the first such advance for seven months.

The rate at which construction firms are putting up houses simply cannot match the rate at which first-time buyers are looking to move in. With this phenomenon set to keep on fuelling home price rises, and the government and lenders alike making it easier for people to borrow, I believe that the stage is set for stocks such as those I have mentioned to enjoy terrific earnings growth.

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Royston Wild owns shares of Barratt Developments. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.