More mortgage approvals defy rate hike

29 November 2006
Mortgage approvals for October were at the highest level for almost three years, the Bank of England has announced.

Last month, there were 128,000 approvals for home-purchase loans, well over the six-month average.

This was also the highest number since December 2003 – a thousand more than were registered in September 2006.

Net mortgage lending also rose under the impetus of continuing rising house prices, with the biggest leap to net lending since September 2003, at £9.8 billion.

The Bank of England report also revealed that growth in unsecured lending, including borrowing on credit cards, rose by £1.1 billion in October, taking the annual rate of growth down to 6.2 per cent, a significant drop on a growth rate of 8.9 per cent on unsecured lending at the start of 2006.

The slower rate of growth in unsecured lending suggests the message of caution over borrowing from banks, financial services advisers, the government and opposition politicians may be impacting on consumer behaviour.

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