Mortgage approvals hit 15-month high

Mortgage approvals hit their highest level since March 2008, according to the latest statistics from the British Bankers Association (BBA).

The figures show 35,235 mortgages were approved last month, up from 31,919 in May and up by 65% from a year earlier.

Remortgages also rose, from 25,825 in May to 28,133 in June, but were still 52% lower than a year earlier. However, the trend appears to be stabilising at current levels, according to the association.

Net mortgage lending rose by 5.1% year-on-year to £2.6bn in June. This was below the average of £3.1bn pounds in the preceding six months but above the May figure of £2.4bn.

David Dooks, BBA director of statistics, says: "Numbers of new home loans approved by the high street banks are recovering from the very low level last November and so far this year, gross mortgage lending has topped £50bn. After repayments and redemptions, the banks' net rise in mortgage lending of £18bn pounds in the first six months is in sharp contrast to lending by the rest of the market, which is still contracting."

Simon Rubinsohn, Royal Institution of Chartered Surveyors (RICS) chief economist says the increase in mortgage approvals in June showed there were growing levels of interest in the housing market.

He adds: "The reading on this indicator in the June survey was sufficiently strong to suggest that mortgage approval activity will rise further over the coming months. That said, it is important to recall that the absolute level of mortgages being sanctioned is still low by historic standards and consistent with a relatively fragile housing market."