Gross mortgage lending rises to 17-month high
Tuesday, 25 August 2009 11:03 AM
Mortgage approvals hit a 17-month high in July as the housing market showed more signs of recovery, according to the latest figures.
The British Banker's Association (BBA) said 38,181 mortgages were approved for house purchase in July totalling £8.4 billion, a sizeable increase on the 35,564 loans approved the previous month although those loans accounted for £8.1 billion of lending in June.
It also represented the highest number of mortgages approved since February 2008.
But new lending was offset by people reducing their debt on existing mortgages as households became more prudent in the recession.
Net lending, which removes repayments, was actually down on June rising by £1.6 billion compared with a £2.2 billion rise in June. The increase was the smallest since October 2000.
David Dooks, director of statistics at the BBA, said: "The numbers of mortgages approved for house purchases each month by the high street banks have continued to recover from last November's low point but new lending is largely being offset by repayments so that net rises remain relatively weak."
The recession, he said, had made householders more conscious about their finances while lower interest rates were enabling them to either increase their monthly repayments or to maintain their existing payments and pay-off their mortgage early.
