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Mortgage lending rises by £0.9bn in October: BoE

by: Mortgage Solutions
  • 30/11/2009
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Total net lending secured on dwellings increased by £0.9bn in October, according to the latest statistics from the Bank of England (BoE).

This increase was in line with the September increase of £0.9bn and above the previous six-month average of £0.6bn. The twelve-month growth rate was unchanged at 0.8%.

The number of loan approvals for house purchase in October stood at 57,345, above the September figure of 56,205 and above the previous six-month average.

However, approvals for re-mortgaging at 24,596 were below both the September figure and the previous six-month average. Loans approved for other purposes stood at 29,195, which was higher than in September and higher than the previous six-month average.

David Whittaker, managing director of Mortgages for Business said the figures are likely to be the last positive numbers for 2009.

He added: “First-time-buyers with large enough deposits to secure finance may buoy the market slightly in November as they race to complete before the end of the stamp duty holiday. We are about to hit the seasonal slump proper and borrowing will certainly decrease in December.”

Whittaker warned that if lending does not get off to a good start in January and February 2010, the market will struggle to gain any momentum before the summer months.

He said: “That will create the very real risk of a double dip in the mortgage and housing markets.”

David Brown, commercial director of LSL Property Services, said the figures were another small step in the right direction rather than a giant leap for the industry.

He added: “Lending levels are still a far-cry from what we saw in 2007, and it will be a long haul before we reach those heady heights. The people who need mortgage finance to the most still cannot get hold of it.”

 

 

 

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