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Bank reports a rise in home loan approvals

HOME loan approvals rose in October to a 19-month high as the housing market showed signs of recovery.<br /><br />Banks approved 57,345 mortgages in October against 56,205 in September, the highest since March 2008 and the 11th monthly rise in a row, the Bank of England said.<br /><br />Net mortgage lending rose by &pound;922m in October versus &pound;898m in the previous month.<br /><br />The trend broadly matched that reported last week by the British Bankers Association.<br /><br />Net secured lending rose by more than &pound;3bn in the three months to October, against &pound;443m in the prior three months.<br /><br />Royal Institution of Chartered Surveyors&rsquo; (Rics) chief economist Simon Rubinsohn attributed the rise in loans and house prices to a more positive approach by lenders and a shortage of homes for sale.<br /><br />Although the pace of price increases was likely to slacken with more supply, prices would still rise, he said.<br /><br />&ldquo;Recent Rics?surveys do point to a gentle pick-up in the number of new instructions, but they are still at historically low levels and not keeping pace with demand,&rdquo; he said.<br /><br />&ldquo;This imbalance helps to explain why house prices are continuing to push upwards.<br /><br />&ldquo;With new buyer enquiries at estate agents still rising more rapidly, it is likely prices will continue to move higher.&rdquo;<br /><br />Brian Murphy of independent mortgage broker Mortgage Advice Bureau said confidence was slowly returning.<br /><br />&ldquo;Mortgage activity around the UK has picked up steadily since August, albeit, of course, at low levels historically. There is certainly an element of seasonality involved in the autumn figures, although that should not detract from a clear shift in the mentality of lenders and borrowers.&rdquo;<br />