Mortgage approvals nearly double in October

The BBA said that there were 42,238 mortgage approvals for house buying in October, up by 97.7 per cent from October last year. However the figure was still down 6.3 per cent from two years ago.

The figure was also higher than average number of approvals per month from the last six months of 37,705.

The average value of loans for new houses was £142,000, up 10.6 per cent on an annual basis.

Gross mortgage lending in October was £9.0 billion, down 19.5 per cent from last year, but up marginally from £8.9 billion in September 2009. A net increase in mortgage lending of £3.1 billion was also reported, representing annual growth of 4.6 per cent.

In the past six months the average net increase in mortgage lending has been £2.7 billion.

Gross mortgage lending for new houses was £6.1 billion, up from £6.0 billion in the previous month and up 118.3 per cent from the same time last year.

Despite the increase in mortgage lending for new houses, re-mortgaging fell significantly, with only 20,685 loans for re-mortgaging in October, down 61.8 per cent from last year and down 64.3 per cent from two years ago.

In the last six months the average number of loans for re-mortgaging was 24,811 per month.

The average value of re-mortgaging loans fell on an annual basis by 10.7 per cent to £131,600.

The BBA said that the figures reflected low levels of mortgage lending at the end of last year. The BBA added that their figures showed that “consumer credit continued to be weak and lending to non-financial corporates fell.”

David Dooks, statistics director of the BBA, said, “The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution. The banks' mortgage lending, still growing by more than 4% a year, shows one aspect of consumer behaviour but unsecured borrowing is subdued and people are building up deposits.

"A mixture of lower business demand, alternative corporate funding and tighter lending conditions, all giving rise to the on-going contraction in lending to non-financial companies, is a reflection of current market conditions."