Mortgage approvals soar 81%

The number of mortgages approved by major banks in August is up by 81% over the past year, figures from the British Bankers' Association (BBA) show.

Although approvals dipped slightly in August compared with July, they stood at 38,095, a major increase compared to the 21,001 approvals recorded in August last year.

The figures also showed the number of loans for remortgaging was 26,124 in August, a drop from the 30,414 recorded in July which was 47% lower than August 2008.

Net mortgage lending rose by £2.8bn in August, similar to the average of the previous six months. Gross mortgage lending in August rose by £0.1bn to £8.6bn, with house purchase loans accounting for £5.2bn of lending out of this total.

The BBA explains the slower housing market activity means it is taking longer for house purchase approvals to work through to gross lending.

David Dooks, statistics director at the BBA, says the main high street banks' mortgage lending had now stabilised in a market where other lenders are largely inactive.

"Loans approved for house purchase have recovered to early-2008 levels, but low levels of customer demand and a limited number of properties coming onto the market will continue to moderate lending," he says.

"In reaction to the economic conditions, consumers appear to be building up their savings and controlling their appetite for unsecured borrowing."