THE number of mortgages approved by banks is running at about a third higher than a year ago, as the housing market revival continues to gather pace.
Some 37,200 approvals for house purchase worth £5.7 billion got the green light in July, slightly down on a 17-month high of 37,337 the previous month, the British Bankers’ Association (BBA) reported.
The BBA said the “stronger pattern” seen in the mortgage market since the start of the year has continued into the summer months.
Mortgage approvals to home buyers are almost a third higher than in the same period last year and remortgaging approvals are more than a third higher, another sign that the economy is getting back on track.
However, overall mortgage lending remains “subdued” because homeowners are making high repayments on their loans, the BBA said.
The low interest rate environment and various UK government schemes to boost the housing market mean several mortgage lenders have been offering their lowest ever rates in recent months.
With poor returns generally on offer on savings, people have found it more attractive to use any spare cash to reduce their mortgage debt.
BBA statistics director David Dooks said: “Mortgage activity has strengthened during 2013 with the help of UK government schemes but high repayments and redemptions mean, however, that we are not seeing increases in net mortgage borrowing for the high street banks.”
Schemes such as Funding for Lending and Help to Buy have prompted stronger competition, making mortgage deals easier to access.
However, Jonathan Harris, director of mortgage broker Anderson Harris, said that despite the uplift in activity, house sales are still “far lower than they were at the height of the boom years” though estate agents said mortgage inquiries were high.