Mortgage approvals rise by 17% |
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Sun, 30 Oct 2005 11:35
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The number of mortgages approved by banks for purchase of houses increased by 17 per cent in the last month as against September 2004, endorsing the financial analysts’ claim that the housing market had stabilised.
Total mortgage lending by the banks in UK grossed £17.8 billion in September. This is also the biggest monthly increase recorded this year. According to British Bankers' Association (BBA) figures, it is the highest monthly total since July 2004. It has increased by 6 per cent compared to August. It has registered a 9.3 per cent growth when compared to September 2004.
However, the average loan withdrawn for a house purchase remained unchanged over the month at £130,500. The average recorded in September last year was £111,300. Net lending, which includes total advanced subtracted by repayments and redemptions rose by £4.9 billion as against £4.4 billion in August 2005.
The number of mortgage approvals in September were 199,031 home loans which were totally worth £19 billion.
David Dooks, director of statistics at the BBA, said: “September’s upturn in both gross and net mortgage lending possibly reflects a delay of the demand normally seen in the late summer.”
Boost from remortgaging can be seen as two-year fixed rate loans taken during the upbeat period of 2003 were expiring. In fact, the number of remortgages approved was higher than the number of house purchases loans for the first time since March.
“It would appear that the rebound in housing market activity following the August rate cut has continued, although we would point out that the strong gains in bank mortgage approvals in August and September are at odds with the building society figures, which have shown no such increase,” according to Michael Hume of Lehman Brothers.
Approvals, which is the number of loans agreed but not yet made rose, to 70,105 in September from 69,499 in August.
However, Dooks said: “The outlook for consumer borrowing remains subdued, with card usage modest in comparison with previous years”.
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Spike in mortgage graph raises market hopes: BBA 