July 23 (Bloomberg) -- U.K. 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.

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.

“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,” David Dooks, statistics director at the BBA, said in the statement.

Bank of England Deputy Governor Charles Bean said yesterday 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 125 billion pounds ($207 billion), saying risks to the economy had probably diminished.

U.K. property prices are also showing signs of recovery, with home sellers raising asking prices this month, Rightmove Plc, the nation’s biggest residential property Web site, said July 20. The average cost of a home in England and Wales rose 0.6 percent to 227,864 pounds after falling 0.4 percent in June.

To contact the reporter on this story: Jennifer Ryan in London at Jryan13@bloomberg.net

Last Updated: July 23, 2009 05:28 EDT