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Mortgage approvals hit 15 month high

Mortgage approvals hit 15 month high

Category: Mortgages

Updated: 04/08/2009
First Published: 24/07/2009

MONEYFACTS ARCHIVE
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Mortgage approvals by UK banks hit a 15 month high in June, fuelling hopes of a property market recovery, according to the British Bankers' Association.

A total of 35,235 mortgages were approved for house purchase last month, bettering May's number of 31,919. Approvals were up by 65 per cent compared to June 2008.

The average value of an approved mortgage stood at £136,400 in the month, with the increase in gross mortgage lending being the first rise since April 2008.

"Numbers of new home loans approved by high street banks are recovering from the very low level last November and so far this year, gross mortgage lending has topped £50 billion," said David Dooks, BBA statistics director.

"After repayments and redemptions, the banks' net rise in mortgage lending of £18 billion in the first six months is in sharp contrast to lending by the rest of the market, which is still contracting."

While the property sector seems to be gaining some momentum, albeit from an historically low level, remortgaging and other loans continue to struggle. Personal loans contracted by £1.3 billion, while remortgaging remained steady at just over 28,000.

It follows figures released by the Finance & Leasing Association on Monday which showed that consumers are reining in their spending, with consumer credit down 18 per cent annually.

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