British Bankers' Association says annual rise for August due to low levels of lending last year

UK mortgage approvals in August have risen 81.4% compared with the same period last year, according to figures released by the British Bankers’ Association.

The BBA said the year-on-year rise can be explained by the extremely low levels of lending a year ago.

The number of approvals for August was 38,186, a slight dip compared with July.

Commenting on the figures Brigid O'Leary, RICS senior economist, said:

" Lending for new house purchase was virtually unchanged in both value and volume terms between July and August. This is probably a sign that banks are still either not willing or not able to extend their mortgage lending facilities, but it could also be an indication that low levels of property for sale are constraining any increase in potential transactions and, therefore, mortgage approvals.”

The RICS also pointed to BBA data on finance for the construction sector, which showed that net lending in the sector was negative in August for the eighth consecutive month to the tune of £522m pounds.

O’Leary said: “Even if appetite for construction activity is diminished in the present climate, the lack of funding is likely to force even viable development projects to be shelved and that will only amplify the extent of the downturn in the construction sector."

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