UK house prices: Mortgage lending up 26 per cent in October as lending recovery gains momentum – the British Bankers’ Association
Mortgage borrowing was a giant 26 per cent higher in October than in the same month last year, according to figures released by the British Bankers Association.
The amount loaned out reached £12.9bn, with the number of mortgages approved by lenders up 27 per cent on last year.
Approvals for house purchase were up 21 per cent while approvals for remortgaging jumped 34 per cent.
The BBA data chimes with figures released by the Council of Mortgage Lenders earlier this month that showed October was the strongest month for mortgage lending since 2008.
Richard Woolhouse, chief economist at the BBA, said:
These statistics show that housing market activity remained strong in October, with gross mortgage borrowing 26 per cent higher than a year ago and at its highest level for seven years.
Consumers remain confident and their incomes are growing. Mortgage rates are at multi-year lows and people are snapping up the very competitive deals being offered by banks.
Banking giant HSBC recently said that the UK was spending billions more on mortgage payments than in needed to and urged borrowers to get on the phone to their lender and get a better deal.
Lending to companies was "polarised", the BBA said, with lending to wholesalers, retailers and manufacturers growing while lending to the construction sector continued to decline at rates in excess of 10 per cent year-on-year.
Part of the reason is due to companies choosing to raise cash through capital issuance – issuing bonds or shares instead of a bank loan. Net capital issuance – the amount of bonds and share issues minus those that have been redeemed or bought back – has grown £18.2bn this year, the BBA said.