Business

Home-buyers mortgage approvals up in October following drop

Lending for mortgages edged up during October

THE number of mortgage approvals made to home-buyers in Britain and Northern Ireland edged upwards in October following a dip the previous month, Bank of England lending figures show.

Some 69,630 mortgages with a collective value of £12.2 billion were approved for house purchase in October, marking the highest figure seen since 70,748 approvals were recorded in August.

Meanwhile, consumer credit continued to grow at its strongest levels since 2006, prompting concerns about people's reliance on personal loans, overdrafts and credit cards in order to make ends meet.

The Bank's Money and Credit report for October also showed annual growth of 8.2 per cent in consumer credit, matching the rate of growth seen in September. The annual growth rates in consumer credit seen over the past couple of months are the strongest seen since February 2006.

Joanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: "These figures confirm that we are in the middle of a significant and prolonged rise in borrowing by households, with consumer credit now growing at its fastest rate since 2006.

"While many will be able to service this extra borrowing, we remain concerned that a minority are turning to credit to make ends meet."

She warned: "There remains a significant number of households who are just about getting by, and an increase in debt repayments could tip many into financial difficulty."

The Government's new Help to Buy Isas, which aim to give people trying to get onto the property ladder a helping hand to save for a deposit, are also set to launch today.

A stamp duty hike for buy-to-let investors was also announced last week, prompting suggestions that some people may rush to snap up properties in the coming months before this comes into force next year.

Mr Rollings said there could be a "winter flurry of buy-to-let borrowing before April's stamp duty shake-up".

He said: "The big question as we enter the New Year is whether the supply of homes will match the increasing demand that's clearly evident in the mortgage market."

The Bank also reported that lending to non-financial businesses increased by £2.3 billion in October, marking the highest figure since March.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "It is vitally important for the UK's ability to generate balanced, sustainable healthy growth and to lift productivity that all companies who are in decent shape and who do want to borrow - whether it be to invest to add or upgrade capacity, improve production processes, explore new markets or generally support their operations - can do so, and at a non-punishing interest rate. This applies to all companies, whatever their size."

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