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Bank lending boosted by 32% for October against last year

Banks lent 32 per cent more to mortgage borrowers in October than they did a year earlier.

According to figures released last week by the British Bankers’ Association, the major banking groups, which are responsible for two-thirds of all mortgage lending, advanced £9.9bn in October, compared with £7.5bn the October before. The figures are seasonally adjusted.

On a monthly basis, lending edged up £0.2bn on the month before.

Net lending was -£167m in October, compared with -£55m the October before. In September net lending was -£260m.

Mortgage approvals totalled 74,743 in October, up 19.7 per cent on the 62,396 approvals in October 2012.

In October, there were 42,808 approvals for house purchase, 23,300 for remortgage customers and 8,735 for other secured borrowing. This compares with 32,082, 19,628 and 10,686 respectively in October 2012.

The value of mortgage approvals was up 34.6 per cent, from £7.9bn in October 2012 to £10.6bn in October this year.

BBA statistics director David Dooks says: “The housing market continues to pick up. October’s new mortgage borrowing was 32 per cent higher than in October last year and approvals for house purchase were 33 per cent higher.”

Capital Economics property economist Matthew Pointon says: “As the economy recovers, mortgage approvals for house purchase will rise steadily. But concerns that a new credit-fuelled house price boom is around the corner seem overdone.

“Lenders are wary about extending mortgages to households with fragile finances and against homes that look overvalued. There is no indication that the booming mortgage market of 2006-07 is set to return.”

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