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Mortgage approvals rose again in January

24 February 2009 / by Rebecca Sargent
Mortgage approvals for house purchase rose again in January, seeing an increase from 22,416 in December 2008 to 23,376, figures released today by the British Bankers Association (BBA) have revealed.

Meanwhile, the figures show that net mortgage lending continued to rise in January 2009, by a total of £2.9billion.The increase is slightly less than the £3.3billion increase in December 2008, but overall annual growth for mortgage lending remains in double figures at 10 per cent.

Commenting, BBA statistics director David Dooks said: "The high street banks' mortgage lending is still seeing double-digit annual growth, albeit in a much slower market.

"Lower borrowing costs and falling property prices have underpinned demand at these lenders, who are providing over two-thirds of all new mortgage lending."

Mortgage lending has been at the heart of the credit crunch from the beginning, and as a recession takes hold, high street banks including Lloyds Banking Group and RBS are being propped up by the Government, which Liberal Democrat shadow chancellor Vince Cable says the Government should be using to its advantage.

"The Government should be using its large shareholding in RBS and Lloyds to make sure they increase lending to sound borrowers," Mr Cable said.

But the BBA's chief executive, Angela Knight argues that banks can only do so much. Speaking to the Society of Conservative Lawyers on the future of banking regulation, she said:

"There is a limit to how much of the burden banks can bear alone. They are being squeezed by calls to lend more – while being told that they need to look for deposits before doing so.

"Banks are already providing around two thirds of new home loans as others are currently unable to provide mortgages."

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