Mortgage approvals in fresh climb


sold signsMortgage approvals to home buyers climbed to a three-month high in April amid further signs that activity is gathering pace, high street banks have reported.

But the British Bankers' Association (BBA) said that despite the upturn in the housing market, low consumer confidence generally means that people still lack the appetite to take on new borrowing and are making determined efforts to shore up their savings.

Some 32,153 mortgages worth £5 billion were approved for house purchase in April, marking the highest number of approvals seen since January.

The BBA said that more first-time buyers are expected to enter the market in the coming months, which should help to free up some stuck housing chains.

The market has been boosted by various Government schemes, including Funding for Lending, which has given lenders access to cheap finance to help borrowers and prompted lenders to spruce up their mortgage ranges and slash their rates.

Other initiatives called NewBuy and Help to Buy have been launched specifically to give people with smaller deposits a helping hand.

The Council of Mortgage Lenders (CML) reported earlier this week that April was one of their strongest months since the financial downturn, with lending up by one fifth year-on-year. Surveyors and property websites have also been reporting evidence of confidence returning to the housing market, helped by a pick-up in buyer demand.

However, the BBA's statistics director David Dooks said that consumer confidence remains subdued, despite the signs of life returning to the housing market as banks offer more competitive rates and products. He said: "Low consumer demand is depressing demand for new borrowing and consumers are continuing to save, with deposits rising by 5.5% over the year to April."

The BBA's figures showed that net borrowing by non-financial businesses decreased by £2 billion in April, while for financial businesses it fell by £3.7 billion.

The report said firms are continuing to hold back while they wait for more certain trading conditions and prospects for investment.

© 2013 Press Association