Remortgage lending increased by 27.6 per cent year-on-year in October, according to data from the Bank of England.
Remortgage lending by the major UK lenders totalled £3.7bn in October, up from £2.9bn in October 2010, but down marginally on the £3.8bn lent in September.
Total gross mortgage lending was £10bn in October, down slightly on the £10.1bn lent in September but up 8.7 per cent on the £9.2bn lent in October 2010.
Lending for house purchase was little changed on either a monthly or annual basis. It totalled £5.5bn in October, down slightly on the £5.6bn lent in September but up marginally from the £5.4bn lent in October 2010.
Furthermore, the Bank’s lending to individuals report shows that total lending secured on dwellings rose by £1.3bn in October, greater than the previous six-month average increase of £0.6bn.
Gross lending secured on dwellings totalled £12bn in October, down slightly on September’s £12.2bn. Repayments were £11bn, 4 per cent lower than September’s figure of £11.5bn.
The number of loan approvals for house purchase increased by 3 per cent from 51,193 in September to 52,743 in October. This represents a 7.4 per cent increase on the previous six-month average of 49,097.
The number of approvals for remortgaging was broadly in line with August and September at 34,666 but was higher than the previous six-month average of 31,764, by 9.1 per cent.
Capital Economics UK economist Samuel Tombs says while the statistics show a reasonable rise in mortgage approvals, this is unlikely to mark the start of a sustained pick-up in activity.
He says: “The number of mortgage approvals for new house purchase rose from approximately 51,200 in September to 52,700, but this just reversed September’s drop.
“Rapid falls in employment and real earnings, as well as deteriorating conditions in wholesale funding markets, suggest that approvals are unlikely to keep rising.”