Mortgage approvals rose to their highest level since March 2008 in September, the Bank of England has reported.

The number of mortgages approved for houses purchased rose by 3,000 in September to 56,000.
Non-mortgage borrowing by individuals shrank for the third consecutive month, representing the most sustained fall since records began in 1993.

Figures released by HM Revenue & Customs show a rise in house sales to 82,000 in September, double that of January.

“Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market,” said Adrian Coles, of the Building Societies Association (BSA).

“However, lending is still at levels much below that of previous years, and the slight recovery remains fragile,” he warned.

Whilst the number of house sales is increasing, other types of personal borrowing are in decline. Consumer credit borrowing fell by £300 million in September, after previous falls of £400 million in August and £300 million in July. However, credit card borrowing remained fairly constant.

Other forms of borrowing, including personal loans, car loans and hire-purchase agreements have dipped.

The effects of the recession have led consumers to rein in their spending, while lenders have introduced stricter criteria regarding who can borrow money.

This entry was posted on Friday, October 30th, 2009 at 9:25 am and is filed under Credit Cards, Housing Market, Loans, Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.