British mortgage approvals rise 81 per cent

Published 24th Sep 2009

The number of mortgage approvals in August rose 81.4 per cent from the previous year to levels not seen since before the worst of the credit crisis, the British Bankers' Association (BBA) said today.

Even though August's number dipped slightly from the figure reported in July, after seven successive monthly increases, the BBA was keen to emphasise that the more important trend was steady growth, with mortgage lending returning to levels last seen in early 2008.

The BBA said that 38,186 mortgages were approved in August, only 100 fewer than in July, which was a 17-month high.

The total net amount of mortgages advanced by the high street banks in August 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.

The amount placed in personal deposit accounts rose even further, up by £3.3 billion, beating an average rise of £1.5 billion over the past six months. Meanwhile consumers cut back on credit card spending, with £5.6 billion spent in August, a 13.6 per cent fall from a year ago. The BBA said demand for personal loans was weak with balances having fallen £1.9 billion in the first eight months of this year.

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 purchases 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."

Source: ' Times '

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