Mortgage approvals at 15-month high

Mortgage approvals in August were at their highest since May 2010, according to the British Banking Association’s monthly report on High Street Banking.

The number of mortgages sold was 14 per cent higher than the same month last year, with an average value of £145,500, an increase of 1% year-on-year.

The report suggests the figures are due to an increase in buy-to-let activity.

Jonathan Samuels, CEO of Dragonfly Property Finance, agrees: “Soaring rents are proving irresistible to many landlords, who are returning to the market in their droves.”

However, the overall picture is of caution. Although gross mortgage lending was up £8.2bn from July, net mortgage lending increased by just £0.7bn as high levels of repayment continued.

Net credit card lending was flat for the month, down from an increase of £0.2bn in July, while unsecured credit contracted by 1.2 per cent over the preceding year.

New lending continues to be outweighed by loan and overdraft repayments.

Businesses outside the financial sector repaid more than they borrowed, net lending shrinking by £1.3bn from July.

BBA statistics director David Dooks said: “The general landscape is one of households not wanting to take on more borrowing and businesses waiting for trading conditions to improve before borrowing to expand or invest.”