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| Mortgage approvals up 81% in year | Mortgage approvals up 81% in year |
| (20 minutes later) | |
| The number of mortgages approved by the major banks in August was up 81% from the same month a year ago when the housing market was in a slump. | The number of mortgages approved by the major banks in August was up 81% from the same month a year ago when the housing market was in a slump. |
| The British Bankers' Association (BBA) said the annual rise was exaggerated by the low lending levels of a year ago. | The British Bankers' Association (BBA) said the annual rise was exaggerated by the low lending levels of a year ago. |
| Approvals for house purchases in August dipped slightly compared with July after seven months of month-on-month rises, the figures show. | Approvals for house purchases in August dipped slightly compared with July after seven months of month-on-month rises, the figures show. |
| The BBA said major banks had been more active than other lenders recently. | The BBA said major banks had been more active than other lenders recently. |
| However, the number of homes being put up for sale was low. | However, the number of homes being put up for sale was low. |
| Consumers cautious | Consumers cautious |
| There were 38,095 mortgages approved for house purchases in August by the major banks, compared with 21,001 in August last year. | There were 38,095 mortgages approved for house purchases in August by the major banks, compared with 21,001 in August last year. |
| A year ago the mortgage market was at an "all-time low", according to David Dooks, the BBA's statistics director. However, the figure actually fell even further in November to 18,330. | A year ago the mortgage market was at an "all-time low", according to David Dooks, the BBA's statistics director. However, the figure actually fell even further in November to 18,330. |
| He said that the annual change was "difficult to understand", but was an "exaggeration" as a result of the combination of the low numbers a year ago and the return to the levels of lending seen at the beginning of 2008. | He said that the annual change was "difficult to understand", but was an "exaggeration" as a result of the combination of the low numbers a year ago and the return to the levels of lending seen at the beginning of 2008. |
| Net mortgage lending rose by £2.8bn in August, similar to the average of the previous six months and a year-on-year growth of 4.6%. | Net mortgage lending rose by £2.8bn in August, similar to the average of the previous six months and a year-on-year growth of 4.6%. |
| During the recession households were not taking on extra debt with jobs at risk and the economic conditions uncertain, Mr Dooks said. | During the recession households were not taking on extra debt with jobs at risk and the economic conditions uncertain, Mr Dooks said. |
| "In reaction to the economic conditions, consumers appear to be building up their savings and controlling their appetite for unsecured borrowing," he said. | "In reaction to the economic conditions, consumers appear to be building up their savings and controlling their appetite for unsecured borrowing," he said. |
| The total amount borrowed on credit cards by consumers was down 13.6% in August compared with the same month a year ago, at £5.6bn. | The total amount borrowed on credit cards by consumers was down 13.6% in August compared with the same month a year ago, at £5.6bn. |
| Repayments of credit cards outstripped new use of plastic. Savings levels also jumped by £3.3bn in August, more than double the recent six-month average. | Repayments of credit cards outstripped new use of plastic. Savings levels also jumped by £3.3bn in August, more than double the recent six-month average. |
| In terms of mortgage lending, Mr Dooks said that applications for home loans were generally being approved. Specialist lenders have scaled back their operations considerably in the last year. | In terms of mortgage lending, Mr Dooks said that applications for home loans were generally being approved. Specialist lenders have scaled back their operations considerably in the last year. |
| However, many potential homeowners have been saying that they have been finding it difficult to get a loan, with many needing to put down a large deposit. | However, many potential homeowners have been saying that they have been finding it difficult to get a loan, with many needing to put down a large deposit. |
| Most mortgage lending tends to be to those who have large savings, equity on other properties, or assistance from family members. | Most mortgage lending tends to be to those who have large savings, equity on other properties, or assistance from family members. |
| Sales down | Sales down |
| The number of mortgages approved gives an indication of future activity and prices because the process comes prior to a new homeowner getting the keys. | The number of mortgages approved gives an indication of future activity and prices because the process comes prior to a new homeowner getting the keys. |
| In the mortgage market, banks are doing their bit, but other sectors of the market are not lending or their lending has contracted Mortgage broker Ray Boulger | |
| On Tuesday, HM Revenue and Customs (HMRC) said that the number of homes actually sold in August - 83,000 - was 4,000 fewer than in July, the first drop this year. However, sales were 19% higher than the same time last year. | On Tuesday, HM Revenue and Customs (HMRC) said that the number of homes actually sold in August - 83,000 - was 4,000 fewer than in July, the first drop this year. However, sales were 19% higher than the same time last year. |
| The BBA's David Dooks said that all these factors would lead to a "varied picture" for house prices across the UK. | The BBA's David Dooks said that all these factors would lead to a "varied picture" for house prices across the UK. |
| With interest rates still low, the BBA figures also showed that the number of loans for homeowners who were remortgaging was 47% lower than a year ago, at 26,124 in August. | With interest rates still low, the BBA figures also showed that the number of loans for homeowners who were remortgaging was 47% lower than a year ago, at 26,124 in August. |
| Ray Boulger, of mortgage brokers John Charcol, said that the approval figures were not a huge surprise given that the housing market was at its nadir around September last year. | Ray Boulger, of mortgage brokers John Charcol, said that the approval figures were not a huge surprise given that the housing market was at its nadir around September last year. |
| "In the mortgage market, banks are doing their bit, but other sectors of the market are not lending or their lending has contracted," he said. | "In the mortgage market, banks are doing their bit, but other sectors of the market are not lending or their lending has contracted," he said. |
| He expected house prices to continue to edge upwards as interest rates remained low during the downturn. | He expected house prices to continue to edge upwards as interest rates remained low during the downturn. |