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Mortgage approvals edge back up
The number of mortgage approvals granted to home buyers by Britain's high street banks edged back up to a four-year high in November.
The British Bankers' Association (BBA), which released the figures, said the number of approvals for house purchase was over one third higher than the same month a year ago, paving the way for mortgage lending to remain strong into 2014.
Some 45,044 mortgages worth £7.2 billion were approved for house purchase last month, marking a 39% increase on November 2012 as well as the highest total seen since December 2009.
This follows a surprise dip in October, when the number of mortgage approvals made to home buyers slipped back for the first time in seven months after reaching a four-year high in September.
Gross mortgage lending picked up to £10.3 billion in November, which is also the strongest figure seen since December 2009 and 37% higher than November a year earlier.
Home owners have been taking advantage of low interest rates to make strong repayments on their mortgages. These high levels of repayment have led to some overall contractions in mortgage borrowing in recent months.
But in November, the amount of mortgage debt outstanding saw a small rise of £347 million, marking the first net increase seen since June.
BBA statistics director David Dooks said: "More new mortgages and a net rise in borrowing reflected a stronger mortgage market in November.
"With approvals up a third on a year earlier, lending will continue to be strong in the months ahead."
The housing market has already shown strong signs of a recovery throughout much of 2013 following the launch of a string of Government initiatives to kick start the housing market.
The new phase of the Government's flagship Help to Buy scheme was launched in October, offering state-backed mortgages to people trying to move on to or up the property ladder with deposits as low as 5%.
Experts have raised fears that a lack of supply of homes for sale is putting a strong upward pressure on house prices as more would-be buyers flood into the market.
Both the Royal Institution of Chartered Surveyors (Rics) and Halifax expect house prices to rise across the country by as much as 8% next year, building on the strong price gains already seen this year.
But Kelvin Davidson, a property economist at Capital Economics, said concerns about a looming property boom are "wide of the mark".
He said: "A lthough we do think mortgage lending activity will rise in the coming months, the growth will probably be pretty slow.
"Indeed, anecdotal evidence suggests that many would-be buyers are still failing strict affordability tests being used by lenders."
The BBA also pointed to rising consumer demand for non-mortgage borrowing as further evidence that confidence is growing.
People spent £8.4 billion on their credit cards in November but paid a slightly lesser amount of £8.2 billion back. In the years since the financial downturn, consumers had generally tended to pay back more on their cards than they spent on them in new borrowing. But this trend has been reversed in recent months, which could suggest that consumers are becoming a bit less cautious.
Credit card borrowing has grown by 5.6% over the last year, outweighing a 3.2% fall in borrowing on personal loans and overdrafts. The BBA said that "rising loan demand stimulated by improving consumer confidence" means that net borrowing on personal loans and overdrafts is not shrinking as much now as it had done in the previous six months.
The BBA's figures also showed that borrowing by non-financial businesses decreased by £2.0 billion while borrowing by financial businesses recorded a £4.9 billion rise.
It said that while borrowing by firms remains "subdued" overall, annual growth in borrowing by manufacturing companies has turned positive for the first time since March 2009.