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Mortgage approvals at 18-month high

Mortgage approvals reached an 18-month high in September according to the latest lending figures from the Bank of England.

According to the Bank, there were 56,215 approvals in September, up 68 per cent on September 2008’s figures of 33,419, and the highest figure since April 2008 when more than 60,000 mortgages were approved.

It says total net lending to individuals rose by £700m in September, down from a net increase of £900m in August, but an improvement on the first recorded negative net lending figure by the Bank in July.

Within the total, net lending secured on dwellings increased by £900m, weaker than the August figure of £1.3bn, but above the previous six-month average of £600m.

The number of loan approvals for house purchase, 56,215, was above the August figure of 52,970 and above the previous six-month average, whereas approvals for remortgaging, 25,528, were below the August figure of 28,348 and below the previous six-month average.

Council of Mortgage Lenders economist Paul Samter says: “There is clear evidence of a significant pick up in housing market lending activity from a year ago, even though it remains low on any historic comparison. On the other side of the gross lending equation, remortgaging volumes continue to weaken. Borrowers seem to be opting to stay on low reversion rates, with official interest rates not expected to rise for some time yet.
 
“Overall, the numbers support our view that housing market activity continues to strengthen. But we are cautious about how far we can expect it to continue increasing, with funding still a challenge and the economic outlook still subdued.”

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