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24th Nov 2009
Mortgage approvals continue to climb
Mortgage approvals for house purchase continued their steady ascent in October, hitting the highest level since January 2008.
Figures from the British Bankers’ Association show that house purchase approvals reached 42,238 last month, up from 42,073 in September and 21,361 approvals at the same time last year. The value of house purchase approvals rose to £6.07bn in October, compared to £5.95bn in September and £2.8bn in October 2008.
But the BBA says remortgaging continue to suffer with remortgage approvals languishing at a third of the level seen in recent years.
Banks approved 20,685 remortgage cases last month, less than half the number approved for house purchase.
There were 21,054 remortgage approvals in September and 54,144 in October 2008.
Remortgage approvals accounted for £2.6bn worth of loans in October, against £2.7bn in September and £7.8bn in October last year.
Gross mortgage lending rose from £8.9bn in September to £9bn in October, while net mortgage lending increased for the second time in two months by £3.1bn.
The BBA says that gross lending will continue to be weak in the absence of increased remortgaging activity.
BBA statistics director, David Dooks, said of the latest data: “The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution.
“The banks’ mortgage lending, still growing by more than 4% a year, shows one aspect of consumer behaviour but unsecured borrowing is subdued and people are building up deposits.
“A mixture of lower business demand, alternative corporate funding and tighter lending conditions, all giving rise to the ongoing contraction in lending to non-financial companies, is a reflection of current market conditions.”
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