BoE: Mortgage approvals see slight rise in October

Permalink: BoE: Mortgage approvals see slight rise in October
by Kay Murchie

The Bank of England has today revealed that the number of mortgages approved for house purchases rose for the eleventh consecutive month in October.

Mortgage approvals for house purchases grew to 57,345 in October, a marginal rise from the 56,205 rise reported in September, but a rise of 18% compared with a year earlier.

While October’s rose was the highest since March 2008 - it is still well below average levels of around 85,000 a month during the decade-long housing boom.

Remortgaging activity continued to remain at low levels, as a result of the low interest rate environment, said the Bank.

In the meantime, the Bank also revealed that British consumers repaid the highest amount of unsecured credit on record during October, cutting their debt at double the rate economists had forecast.

According to the Bank, borrowing on credit cards rose by £134 million in October compared with the previous month, but was more than offset by the £713 million in other forms of consumer credit such as bank loans, loans for cars, and hire purchase agreements.

Since the onset of the credit crunch two years ago, consumers have been struggling to obtain credit after the decade of easy credit.

However, it appears that Britons are now paying the price of their borrowing spree as they suffer the longest recession in more than five decades.

Today’s data adds further proof that consumers are paying off debts rather than opting to save in the low interest rate environment.

This was reflected in a separate report from the Building Societies Association (BSA) which showed that there was a net outflow of savers’ funds for the eighth consecutive month.

BSA director general Adrian Coles comments: “There is little incentive for people to increase savings whilst the Bank Rate remains at its current low level, and many may opt to repay debt instead.”