Mortgage Approvals Hit A New High

The number of mortgage approvals has increased by 81% when compared to the same month a year ago and more than double the low of 18,330 reached in November 2008.  However the British Bankers’ Association (BBA) said the annual rise was exaggerated by the unusually low lending levels around August 2008.

Mortgage lending by the major banks increased by 46% in August which followed a dip during the previous month of July, figures have also shown. 

The level of homeowners remortgaging remained subdued at just 26,124, and homeowners releasing equity from their property or taking out a buy-to-let loan is at a new record low of 17,918.

The total net amount of mortgages advanced by the main high street banks in August 2009 was £2.8 billion, against £1.9 billion in July, representing annual growth of just 4.6 per cent against a year ago. The figure strips out redemptions and repayments.

David Dooks, BBA statistics director, said: “The main high street banks’ mortgage lending has stabilised in a market where other lenders are largely inactive.  Loans approved for house purchase have recovered to early-2008 levels, but low levels of customer demand and a limited number of properties coming on to the market will continue to moderate lending.” 

He added: “In reaction to economic conditions, consumers appear to be building up their savings and controlling their appetite for unsecured borrowing.”