Mortgage approvals up, record borrowing falls
Mortgage approvals were up in October, while consumer borrowing fell to record low
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By Darren Estwick. |  |
Monday, 30, Nov 2009 12:34
Banks approved the highest number of mortgages for a year in October, while consumer borrowing, excluding home loans, recorded the largest ever fall.
Figures from the Bank of England found approvals for mortgages reached 57,345 on October, the highest level since March 2008, while the figures for consumer borrowing suggest people are starting to pay off their loans.
Credit card borrowing rose by £134 million from September but October, but the Bank of England said this was offset by a record fall in other forms of consumer credit, of £713 million, for other lending such as car loans.
The figures mean October was the fourth month in a row in which people have repaid more than they took in non-mortgage borrowing.
Mortgage approvals were 18 per cent higher than a year ago, but remortgaging again fell marginally.
Simon Rubinsohn, Royal Institution of Chartered Surveyors (Rics) chief economist said: "Significantly, net secured lending rose by a little over £3 billion in the three months to October compared with just £443 million in the previous three month period.
"While this is still way down on the level of lending seen at the height of the boom in the market, it does suggest that that there is now a little more give from lenders.
"The pace of price increases is likely to slacken as a little bit more supply comes onto the market but with new buyer enquiries at estate agents still rising more rapidly, it is likely that prices will continue to move higher in the new year even if the extended zero rate stamp duty allowance is removed."
James Thomas, head of residential development and investment at Jones Lang LaSalle, added: "Whilst there is evidence to suggest the UK economy is in recovery mode there remain question marks about the depth and sustainability as well as how the public finances can be repaired, quite possibly under a new government.
"The recent pick up in house prices is based on fragile economic fundamentals such as a weak pound, which has driven overseas buyer demand, and a boost from the stock market recovery, both of which are unlikely to be as supportive during 2010."