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Mortgage lending edging up

Mortgage lending in July reached a 14-month high, as the number of loans for both house purchases and remortgages increased. However, the figures are still below the previous six-month average, proving that there's still a long way to go.

Despite approvals reaching a 14-month high, analysts have stated that activity remains very low compared to long-term patterns. Howard Archer, chief UK economist at IHS Global Insight, said that a sense of perspective is needed when viewing the figures.

'Mortgage approvals have actually averaged around 90,000 a month since 1993, while a level of 70,000-80,000 has in the past been considered consistent with stable house prices,' he said.

'Housing market activity remains at a very weak level that historically has been associated with falling house prices, despite rising modestly from their lows earlier this year.'

Loans approved for house purchase rose to 49,239 from June's figure of 48,500. The previous six-month average was 46,822 and the figure is only slightly more than the 48,562 loans approved in July 2010. Meanwhile, the increase in remortgaging activity was negligable, with the number of loans approved rising only 20 on June's figures at 30,810.

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