Figures show soaring mortgage approvals rate
Oct 26 2009 by Graeme Brown, Birmingham Post
New figures show the number of mortgages approved for house purchase has bounced back to levels last seen at the beginning of 2008.
A total of 42,088 loans were approved for people buying a home during the month, the highest level since January 2008 and 77 per cent above the figure for September last year, according to the British Bankers’ Association.
There has been a steady increase in the number of mortgages taken out by people buying a property during the past eight months as the housing market has stabilised.
The increase in property market activity is feeding through into higher mortgage lending, with net lending, which strips out redemptions and repayments, reaching £3.1 billion during September, the highest figure since March.
David Dooks, BBA statistics director, said: “Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year as the number of house purchase approvals continues to recover.
“Housing market activity will depend, however, on more properties coming on to the market.”
But total mortgage advances remained subdued at £8.8 billion, 21 per cent below levels for September last year, as homeowners continued to be discouraged from remortgaging by the low standard variable rates they revert to when their existing mortgage ends. Approvals for remortgaging slumped to 21,282 during the month, the lowest level since December 1999 and 70 per cent below the figure for September 2007, when the market was still functioning normally.
Consumers continued to focus on reducing their levels of unsecured debt during September. Credit card spending was unchanged at £5.6 billion, but people repaid £6.1 billion, in line with the recent trend. This led to plastic debt edging up by only £66 million once interest and charges were factored in.
Borrowing through overdrafts and personal loans also fell by £399 million during September, the 12th consecutive month in which it has contracted.
At the same time, savings levels remained strong, with people increasing their deposits by £2.96 billion, in line with levels seen during the previous three months.
