New mortgage lending continues recovery

Gross mortgage lending in November showed a slight monthly rise, according to the British Bankers’ Association (BBA).

The figure stood £9.2 billion but was still 12% down on a year earlier.

However, banks approved £6.6 billion in house purchase loans, up from £6.1 billion in October and a 200% increase on November of last year.

In terms of volume, house purchase approvals nudged up from 42,552 in October to 44,713, showing an annual rise of £152%.

While annual increases look impressive, the BBA cautions, “comparisons with the low point of a year earlier reflect the weakness of the market then, rather than indicating a much stronger market now”.

Meanwhile, remortgaging approvals were two-thirds lower than two years’ ago as borrowers coming to the end of fixed-rate deals continued to opt for lenders’ relatively attractive reversion rates.

In addition, November approvals for equity withdrawal were about half of the level seen in 2007.

The BBA’s statistics director, David Dooks, comments: “In the housing sector, prices have continued to edge up and approvals for house purchase are now back at a similar level to that of two years ago.”

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