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Approvals hit 20-month low as remortgaging rebounds

  • 23/12/2010
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Approvals hit 20-month low as remortgaging rebounds
Mortgage approvals for house purchase in November reached their lowest level for 20 months, as remortgaging approvals bounced to their highest number since July 2009, the latest figures have shown.

The British Bankers’ Association (BBA) revealed that house purchase approvals by the main high street banking groups were 29,991 in November, down from 30,689 in October and the lowest number recorded since March 2009’s 29,312.

The average value of house purchase approvals rose slightly in November to £145,000, 1.9% higher than a year ago.

By comparison, remortgage approvals jumped in November to 27,045 from 24,785 in October. This is the highest level recorded by the BBA for 16 months, when 29,662 remortgages were approved in July 2009.

Strong mortgage repayments on November also reflected the rise in remortgage approvals in recent months.

However, net mortgage lending fell to a ten-year low of £1.464bn in November, down from £3.4bn for the same month of 2009, and the lowest figure since October 2000.

Nevertheless, the annual growth rate in the high street banks’ net mortgage lending was 3.2% in November compared to just 0.8% for the whole of the mortgage market in October.

Gross mortgage lending was £7.8bn in November, down 13.5% on the same period last year.

David Dooks, statistics director at the BBA, said: “Remortgaging with banks was strong in November as borrowers chose to replace maturing fixed-term mortgages.

“Credit card purchases were fairly strong in November in line with retail sales but repayments also kept up, so the annual growth rate for credit card lending was slightly lower.

“Lending to non-financial companies showed its first net increase since February, partly reflecting finance for takeover activity.”

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