Loan approvals on the rise
Mortgage approvals rose in June to the highest level since March 2008 as the property slump showed sign of easing and banks became more willing to lend, according to The British Bankers' Association...
Loan approvals for home purchases increased to 35,235 from 31,919 in May, the British Bankers’ Association said today in a statement. The level has almost doubled in seven months.
David Dooks, Statistics Director at the BBA, said, “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 50 billion pounds.”
Bank of England Deputy Governor, Charles Bean said the supply of credit is “starting to free up” after the bank started creating money to buy bonds and stoke lending. Policy makers unanimously decided this month to hold their money- printing plan at £125bn, saying risks to the economy had probably diminished.
RICS Chief Economist, Simon Rubinsohn added, “The increase in mortgage approvals for June, over 35,000 mortgages were approved for the purchase of homes – the highest monthly figure since March last year, follows the positive lead provided by the RICS ‘new buyers enquiries’ series which is continuing to show growing levels of interest in the housing market.
“Indeed, 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.
“Meanwhile (non-financial) company borrowing contracted a little over the month, pretty much reversing the modest increase in May. The continuing problems facing the construction industry were visible in the sixth consecutive monthly drop in lending to the sector. Meanwhile although borrowing by the real estate sector edged up again, the suspicion is that this reflects the use of pre-existing credit lines rather than any enthusiasm on the part of banks to raise their exposure to this part of the economy.”
Source: www.housingnews.co.uk