Unexpected lift in mortgage lending by high street banks
High street banks approved 33,039 mortgages for house purchase in October. The figure was up from the 31,544 the month before and an improvement on the six-month average prior to October of 29,984.
The jump was higher than expected, with analysts having predicted a rise to 32,000.
Average approval values for house purchase, however, showed a marked downward trend. The average approval in October was for £154,100 compared with £155,200 in September, and down from £161,000 for the previous six months.
The British Bankers’ Association also reported 20,112 remortgage approvals, again up from the month before (19,929) and on the previous six-month average of 17,977.
Howard Archer, chief UK economist at HIS Global Insight, said the BBA data added to other evidence of a modest pick-up in housing market activity.
High street banks account for about two-thirds of all mortgage lending.
* At the same time, Just Mortgages, the newly rebranded mortgage brokerage business of Spicerhaart, arranged the highest number of fixed rate mortgages this year in October.
The brokers say the rise was fuelled by recent rises in standard variable rates, together with a move by buy-to-let investors towards short-term, special offer fixed term deals.
The firm’s figures show a spike in one- and two-year fixed term applications processed in the last three months.
David Miles, director of Just Mortgages, said: “The number choosing medium-term three- to five-year fixed term deals are also on the rise – albeit not at the same level.
“We would expect this trend to continue for two reasons: some lenders are starting to pass on the benefits of their participation in the Funding for Lending scheme to customers in the form of new rates, and the Bank of England’s base rate is likely to only go in one direction, although opinion is divided as to when this could be.”