Banks report mortgage approvals at two-year high

THE number of new mortgages approved by the main banks rose to its highest level for nearly two years in October.<br /><br />The British Bankers&rsquo; Association said 42,238 loans were approved last month &ndash; nearly double the number seen last October at the height of the crisis. This was a slight increase on the September figure of 42,073.<br /><br />Net lending, which strips out redemptions and repayments, held firm at &pound;3.1bn, but unsecured lending remained subdued as consumers focused on paying down their debts and building up savings.<br /><br />Demand for personal loans has been particularly weak, with outstanding balances falling by &pound;2.9bn in the first three quarters of the year.<br /><br />David Dooks, BBA statistics director, said: &ldquo;The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution.&rdquo;<br /><br />Howard Archer, chief UK economist at IHS Global Insight, said he suspected that the recent firming in house prices would fizzle out before long.<br /><br />&ldquo;This will be even more likely if recently higher house prices lead to more properties coming on to the market,&rdquo; he said.<br />