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Lending on the up, says Bank

Total net lending rose by £300m in October with mortgage lending up nearly £1bn, according to the Bank of England.

In its latest lending survey, the Bank revealed total lending to have risen by £300m, which reduced the 12-month growth rate to 0.7 per cent.

But net lending secured on property rose by £900m, with the number of loan approvals for house purchase of 57,345 above the September figure of 56,205, whereas approvals for remortgaging of 24,596 were below both the September figure and the previous six-month average. This was the 11th consecutive increase in mortgage lending recorded by the Bank.

Mortgage Advice Bureau head of lending Brian Murphy says: “Mortgage activity around the UK has picked up steadily since August, albeit, of course, at low levels historically.

“There is certainly an element of seasonality involved in the Autumn figures although that should not detract from a clear shift in the mentality of lenders and borrowers alike. Slowly, confidence is returning to the property market on both sides.”

The Building Societies Association says mortgage approvals from building societies in October was £1.51bn, which it says is broadly in line with the £1.57bn of approvals in September. It also found that savings accounts at building societies reduced by £929 million in October, which amounted to a net withdrawal of £1.24bn.

BSA director general Adrian Coles says: “There is little incentive for people to increase savings whilst the bank rate remains at its current low level, and many may opt to repay debt instead.”

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