New approvals show first monthly rise in a year, but lending still nearly 50% down on last year

Mortgage approvals rose in September for the first time in a year, revealed the Bank of England this week.

The bank reported that 33,000 mortgages were approved last month, an increase of 1,000 from the record low in August when total mortgage debt fell for the first time since records began in 1993. Mortgage lending was valued at £2.2bn in September, after a fall of £691m in August.

Figures released from the Building Society Association (BSA) showed that net mortgage lending by building societies increased in September for the first time in four months. However, lending is still 47% down on the same month a year ago.

Adrian Coles, director general of the BSA, said: “The mortgage market is unlikely to recover for some time. Nevertheless, the increase in net lending in September is to be welcomed.”

The raised threshold for stamp duty to £175,000 in early September is believed to have contributed to the rise in mortgage approvals.

However, Dominic White of the Royal Bank of Scotland warned that the squeeze on mortgage lending is far from over.

He said: “It may well be we're looking at 2009 before mortgage lending starts picking up from what are pretty depressed levels.”

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