Mayfield Mortgages and Finance Advice

The British Bankers' Association reported that mortgage approvals for house purchases essentially stabilized in August, after rising to a 17-month high in July.

The massive figure reflects the jump in approvals from 21,001 in August 2008 to 38,095 today, reflecting the poor state of the market last year.

Specifically, the BBA revealed that mortgages approved for house purchases edged back to 38,095 in August after trending up to 38,186 in July from just 18,330 in November 2008 (which had been the lowest level since the series started in 1997).

However, while mortgage approvals in August were up 81.4% year-on-year from 21,001 in August 2008, they were still well below the average monthly level of 61,000 reported by the BBA over the past 12 years.

Meanwhile, net mortgage lending rose to GBP 2.8 billion in August from GBP 1.9 billion in July, thereby essentially matching the average level for the past six months. However, this reflects past mortgage approvals and also re-mortgaging activity, and it is the current mortgage approvals for house purchases data that are the key indicator of the current state of housing market activity.

Howard Archer, an economist with Global Insight said: “The BBA data indicates that mortgage activity is currently stabilizing at a level significantly above its November 2008 record low levels, but still well down on long-term norms.”

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