THE number of mortgages approved for house purchase has more than doubled during the past year as the property market continues to recover, figures showed this week.
A total of 60,518 loans for people buying a new home were in the pipeline during November, the highest level since March 2008 and more than double the record low of 27,162 seen in November of that year.
Net lending, which strips out redemptions and repayments, also increased for the third month in a row to stand at £1.46 billion, a level last seen in February, according to the Bank of England.
The improvement in mortgage lending has been driven by increased activity on the housing front, as recent price rises tempt both buyers and sellers back to the market.
Hetal Mehta, senior economic adviser to the Ernst & Young ITEM Club, said: “An acceleration in mortgage approvals and higher mortgage lending bodes well for housing market prospects, but it is unlikely to be sufficient to sustain the rapid price increases seen over the second half of 2009.
“Supply pressures are likely to abate as the price increases encourage more people to put their properties on the market, and with unemployment continuing to rise, demand will remain weak.”
However, unsecured lending contracted for the fifth month in a row as consumers continued to focus on paying off their debts.
People repaid £376 million more of unsecured debt than they borrowed during November, slightly down on October’s net repayment of £591 million, but nearly double the level seen during the past six months.