U.K. mortgage approvals rose last month to the highest level since January, adding to signs of stabilization in the home loan market, according to the British Bankers’ Association.
Lenders granted 33,634 approvals in November, up from 33,128 in October, the group said in a monthly report today. Gross mortgage lending of 7.7 billion pounds ($12.5 billion) was “above the recent monthly average,” it said.
The Bank of England has introduced a program to boost credit and said last month that mortgage approvals rose more than economists forecast in October. Still, property researcher Hometrack Ltd. said this week that a decline in home prices will extend into 2013 as a reluctance to borrow weighs on demand.
Households “continuing to repay virtually as much as they borrow and, as people hold on to cash, deposits are growing by 6 percent annually,” said David Dooks, BBA statistics director. “The situation is not dissimilar in the business world; businesses are holding back investment or expansion plans and building up cash reserves.”
Net mortgage lending rose 164 million pounds in November after an 89 million-pound increase in October, the BBA said. Including remortgaging and other secured lending, the number of approvals for loans secured on property was about 63,000 in November. That compares with 230,000 a month in the peak year of 2003.