THE number of mortgages approved for house purchase rose to its highest level for nearly two years during October, figures showed this week.
About 42,238 loans were approved during the month, nearly double the number seen in October last year and the highest level since January 2008, according to the British Bankers’ Association.
Net lending, which strips out redemptions and repayments, also held firm at £3.1 billion. However, unsecured lending remained subdued as consumers focused on reducing debts and building up savings.
David Dooks, BBA statistics director, said: “The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution.
The banks’ mortgage lending, still growing by more than four per cent a year, shows one aspect of consumer behaviour but unsecured borrowing is subdued.”
Both spending and repayments on credit cards was unchanged from the previous month at £5.7 billion and £6 billion respectively.
Consumers continued to save during the month, with people setting aside £3.2 billion, contributing to a £17 billion increase in deposit levels since the beginning of the year.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: “Inevitably, the number of new instructions will remain fairly subdued into the year-end but it is crucial that more fresh stock is put up for sale to give the market a further boost.
“This is critical to prevent a further sharp increase in house prices.”