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Mortgage approvals hit 23-month high

Thursday, 5 January 2012 9:19 AM

Mortgage loan approvals for house purchase edged up in November to hit the highest level since the end of 2009, according to the Bank of England.

Some 52,900 mortgages were approved in the month, up slightly on October and by 12 per cent on November 2010. Economists had been expecting a fall.

However, the total is still well down on the levels seen before the credit crunch in 2007 and the average of 88,000 per month seen since 1993.

And the number of loans for remortgaging fell again to 31,200, the lowest level since June 2010.

Samuel Tombs of Capital Economics said: "We fear that approvals for new house purchase might soon start to fall as banks further restrict the availability, and raise the price, of credit in response to the deterioration in wholesale funding markets."

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The modest rise in mortgage approvals to a 23-month high fails to mask the fact that housing market activity remains very weak compared to long-term lows and has been unable to develop significant upward momentum.

"With the economic environment looking decidedly worrisome, we believe that house prices are headed downwards in 2012."

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