The number of mortgages approved in October rose to 69,630, just up from September's 69,012 figure and higher than the 68,099 average over the last six months, Bank of England figures published today showed.
The value of new mortgage approvals hit £12.2bn. The October total was just shy of the 70,000 figure forecast by analysts and up 17.2 per cent year-on-year, from 59,423 in October 2014.
Howard Archer, chief economist at IHS Global, said mortgage values were being lifted by higher house prices, adding:
While housing market activity has clearly picked up appreciably overall during 2015, the slight easing back in mortgage approvals for house purchases from August’s peak levels could possibly reflect housing market activity being constrained by a shortage of properties on the market.
It is also evident that mortgage activity has been lifted in recent months by people looking to tie in attractive mortgage interest rates before interest rates start to rise.
The number of remortgaging approvals fell to 39,629, from almost 41,000 in September, but still higher than the six-month average of 38,430.
Total lending to individuals rose by £4.8bn in October, above the average monthly increase of £4.1bn over the last six months. The total amount outstanding is now £1.46 trillion.
Consumer credit increased by £1.2bn in October, just below the £1.3bn average monthly increase over the previous six months. Consumer credit has grown 8.2 per cent over the last year, the fastest growth since 2006, the Bank of England said.
Archer pointed to high consumer confidence and lower interest rates driving consumer borrowing, but said the increase in debt had stabilised, which may "reflect the fact that fewer households are having to borrow due to the appreciable boost to purchasing power coming from negligible inflation, rising earnings growth and record high employment".
The average monthly increase in spending has jumped dramatically, from £157m in 2012, to £630m in 2013 and in 2014 the average monthly increase was £871m, compared to the £1.2bn increase we've seen in 2015.
Credit card lending rose by £300m in October, in line with average monthly increases.
Nicola Georgiou, managing director at Freedom Finance, added:
It seems clear that consumer confidence is continuing to grow steadily. This rise follows warnings from the Bank of England that policymakers may need to take action to prevent excessive consumer borrowing as the economy recovers.