Mortgage lending at near record levels

Gross mortgage lending reached near record levels in November, confirming the upturn in the number of homebuyers in the latter part of 2005.

At £18 billion the total amount lent through mortgages was 23 per cent higher than in November 2004, according to data from the British Bankers' Association (BBA).

Of this, approvals for house purchase loans were more than 50 per cent higher by number and 64 per cent higher by value than the same month a year earlier.

Remortgaging loans increased by 17 per cent by number and 34 per cent by value, while equity release mortgages increased one per cent by number.

"Gross lending on mortgages reached a very high level in November confirming the recovery in the housing market after a relatively weaker early part of the year," said the BBA's David Dooks.

"Approvals, particularly for house purchase, continued to be strong with little evidence of the normal seasonal slowdown."

The average mortgage approval for house purchase increased to £130,800.

The figures have been described by economists as "very healthy" and positive news for the property market.

Howard Archer, chief UK economist at the Global Insight consultancy said: "Activity is benefiting from August's interest rate cut, increasing confidence in the housing market and still rising employment.

"This is likely to put a floor under house prices, but we remain highly doubtful that house prices will move substantially higher on a sustained basis any time soon."