BBA reports slight rise in October mortgage approvals

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by Kay Murchie

The British Bankers’ Association (BBA) has today revealed a small rise in the number of new mortgages approved by the major banks in October.

According to the BBA, approvals increased by just 165 during the month from 42,073 in September to 42,238 last month.

However, while the rise was marginal, the BBA points out that the figure is almost double compared with October 2008 and just 6.3% lower than in October 2007 - at the peak of the housing market.

Meanwhile, remortgaging activity continued to remain at low levels, as a result of the low interest rate environment, declining from 21,054 in September to 20,685 - a fall of 62% on year.

Commenting on the latest figures, David Dooks, the BBA’s 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 4% a year, shows one aspect of consumer behaviour but unsecured borrowing is subdued and people are building up deposits,” added Mr Dooks.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, comments: “Although the availability of finance for homebuyers has increased, with some evidence of a modest relaxation in the strict control on loan-to-value ratios for first-time buyers, access to the property market still remains challenging, particularly given the rebound in residential prices in recent months.”