Mortgage approvals hit 13-month high

The number of mortgages approved for house purchase rose to a 13-month high in May as buyers continued to return to the property market, figures showed this morning.

A total of 31,162 loans were approved for people buying a property last month, 7 per cent more than in April, the British Bankers’ Association said.

The figure was also 15.8 per cent higher than it had been in May 2008, the first time the annual measure has shown an increase since November 2006.

However, the average value of the loans was just £133,600, 13.9 per cent lower than the year before.

In total banks' net mortgage lending was £2.3 billion in May, the lowest monthly rise since early 2001, and down from £2.5 billion in April and below the £3.2 billion average of previous six months.

David Dooks, the BBA’s statistics director, said: “Steady monthly increases since last November have seen the number of loans approved for house purchase recover to levels seen in early 2008, although gross and net mortgage lending show a subdued wider mortgage picture.

“However, unlike much of the mortgage market, the high street banks are still seeing lending growth and improved mortgage availability is reflected in higher average loan approval values.

“Consumers’ borrowing appetite remains weak, reflecting uncertainty over household circumstances, so credit growth is negligible and spending activity on credit cards is down on this time last year. Lending to non-financial companies was little changed overall in May.”