29
Oct
Strong rise in mortgage approvals
Mortgage approvals rose to the highest level since March 2008 in
September, according to the Bank of England.
The number of mortgages approved for house purchase, but not yet
lent, rose 3,000 during the month to 56,000.
Mortgage approvals are a good indicator of short term trends in
the property market, and have risen this year in line with recovery
in completed sales.
Non-mortgage borrowing by individuals shrank for a third month
in a row - the first time since records began in 1993.
According to recent figures from HM Revenue & Customs, sales
rose to 82,000 in September, double the number sold in January.
"Lending activity has recovered in recent months, when compared
to the start of the year, as buyers and sellers tentatively return
to the market," said Adrian Coles, of the Building Societies
Association (BSA).
"However, lending is still at levels much below that of previous
years, and the slight recovery remains fragile," he warned.
Simon Rubinsohn, chief economist at the Royal Institution of
Chartered Surveyors said:
"A little more money is now flowing through into the mortgage
market."
"However the ending of the stamp duty exemption on properties
valued at £175,000 or less at the end of December could hit
activity levels particularly outside of London and the south east
in the early part of 2010," he said.
Up and down
While the recent pick-up in property sales seems likely to
continue for the time being, other forms of personal borrowing are
in decline.
Consumer credit borrowing fell by another £300m in
September, after falls of £400m and £300m in August and
July respectively.
Within this, credit card borrowing held up, albeit with low
levels of growth.
But other forms of personal borrowing, such as bank loans, car
loans and hire purchase agreements, have fallen.
Under the combined impact of the recession and the credit crunch
consumers have reined in their spending while lenders have become
fussier about to whom they will lend.
In fact non-credit card personal borrowing has dropped in eight
out of the past nine months.
This has been the longest stretch of contracting lending since
the Bank's records started in 1993.
source: www.bbc.co.uk/news Thursday 29th
October 2009