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Mortgage approvals highest for 13 months

Mortgage approvals by the main high-street banks rose by an annual rate of almost 16 per cent last month, touching a 13-month high, according to the British Bankers' Association.

The BBA said a total of 31,162 loans were approved for house purchases, suggesting a more stable outlook for the depressed housing market. The average value of the loans, although below the levels seen last year, has also risen steadily over the last six months.

The market remains subdued, however. Despite rising approvals, net new mortgage lending grew by £2.3bn – the weakest monthly rate of growth since early 2001. The figure, which tempers the picture painted by the data on approvals, compares with a £2.5bn rise in April, and an average rise of £3.2bn over the previous six months. Gross mortgage lending, at £7.7bn, dropped to its lowest level since February 2001.

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