RTTNews - UK mortgage approvals hit the highest since February 2008 amid dynamic housing market activity, a report from the British Bankers' Association showed Tuesday.
Reflecting an improvement in demand from borrowers and loan availability, approvals for house purchases showed a steady increase in the last seven months. The number of mortgages approved in July totaled 38,181 compared to 35,564 in June. Mortgage approvals for July also exceeded the expected level of 37,800 and surged 76.7% from the prior year.
While, the number of re-mortgaging approvals increased to 30,600 from 28,454 in June, approvals for equity withdrawals and other purposes eased to 18,509 from 20,084. Although the number of approvals for remortgaging and other purposes are lower than a year earlier, the trend appear to be stabilizing at current levels, the BBA said.
BBA statistics director, David Dooks said, The numbers of mortgages approved for house purchase each month by the high street banks have continued to recover from last November's low point, but new lending is largely being offset by repayments, so that net rises remain relatively weak.
Net mortgage lending that strips out repayments increased GBP 1.6 billion in July, the smallest rise since October 2000. In June, the net change in lending was GBP 2.2 billion.
As recent increases in approvals worked their way through into lending data, gross mortgage lending stood at GBP 8.4 billion, larger than June's GBP 8.1 billion. Further, loans approved for house purchases in July was GBP 5.2 billion versus GBP 4.7 billion last month. All mortgage loans approved in July totaled GBP 9.7 billion.
Further, the report showed that spending on credit cards stayed at GBP 5.8 billion in July, while consumers repaid debt totaling GBP 6.2 billion.
Recently, a Bank of England report showed that the number of loans approved for house purchase in June reached the highest since April 2008.
According to the property website Rightmove, house prices dropped 2.2% month-on-month to GBP 222,762 in August. Home sellers in the U.K. reduced their asking prices in August after hiking slightly in July, but sentiment continued to improve.
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