Mortgage approvals to home buyers soared to a 16-month high in May in a further sign of a housing market pick-up, high street banks reported.
Some 36,102 mortgages for house purchase worth £5.5 billion were approved during the month, marking an uplift of almost a quarter (24%) compared with May 2012, the British Bankers' Association (BBA) said.
The report predicts that Government efforts to boost mortgage lending will mean more first-time buyers entering the housing market in the coming months, which will help to free some stuck housing chains.
It follows recent figures released by the Council of Mortgage Lenders (CML), which said that May was the best month it has seen for mortgage lending since 2008. The CML suggested that the strong recent uplift, which had even taken it by surprise, was partly down to the bad weather seen earlier this year creating a "pent-up" demand.
Surveyors, estate agents and property websites have been reporting confidence returning to the housing market in recent months, with demand from would-be buyers strengthening and house sellers appearing more bullish about sticking close to asking prices.
Some 36,102 mortgages for house purchase worth £5.5 billion were approved during the month, marking an uplift of almost a quarter (24%) compared with May 2012, the British Bankers' Association (BBA) said.
The report predicts that Government efforts to boost mortgage lending will mean more first-time buyers entering the housing market in the coming months, which will help to free some stuck housing chains.
It follows recent figures released by the Council of Mortgage Lenders (CML), which said that May was the best month it has seen for mortgage lending since 2008. The CML suggested that the strong recent uplift, which had even taken it by surprise, was partly down to the bad weather seen earlier this year creating a "pent-up" demand.
Surveyors, estate agents and property websites have been reporting confidence returning to the housing market in recent months, with demand from would-be buyers strengthening and house sellers appearing more bullish about sticking close to asking prices.
Mortgage availability has sharply increased and mortgage rates have fallen since the Government launched its Funding for Lending scheme last August, followed by other initiatives designed specifically to help people to get a mortgage with a smaller deposit.
Elsewhere, the BBA said that credit card borrowing is on the increase, with £7.8 billion spent on cards in May, which is slightly higher than the recent monthly average. However, this was matched by £7.8 billion worth of repayments made on credit cards during the month, continuing a long-running trend of consumers trying to pay down their debts.
The BBA has seen an annual growth in credit card borrowing of 6.5% but this has been eclipsed by borrowing on personal loans and overdrafts shrinking back by 6.7%. Personal deposits rose by 5.5% over the year to May, reflecting a continued trend of people acting cautiously and trying to shore up their savings.
The BBA also said that tough trading conditions mean that demand for borrowing from firms continues to be "subdued". Its figures also showed that net borrowing by non-financial businesses fell by £1.7 billion while for financial businesses there was a £3.3 billion decline.
The report said: "Overall business borrowing levels continue to reduce, as smaller and medium-sized firms operate on cash-flow and deposits, rather than investment, while large companies access equity and bond market funding to deleverage bank borrowing."
http://money.uk.msn.com/news/mortgage-approvals-at-16-month-high
Elsewhere, the BBA said that credit card borrowing is on the increase, with £7.8 billion spent on cards in May, which is slightly higher than the recent monthly average. However, this was matched by £7.8 billion worth of repayments made on credit cards during the month, continuing a long-running trend of consumers trying to pay down their debts.
The BBA has seen an annual growth in credit card borrowing of 6.5% but this has been eclipsed by borrowing on personal loans and overdrafts shrinking back by 6.7%. Personal deposits rose by 5.5% over the year to May, reflecting a continued trend of people acting cautiously and trying to shore up their savings.
The BBA also said that tough trading conditions mean that demand for borrowing from firms continues to be "subdued". Its figures also showed that net borrowing by non-financial businesses fell by £1.7 billion while for financial businesses there was a £3.3 billion decline.
The report said: "Overall business borrowing levels continue to reduce, as smaller and medium-sized firms operate on cash-flow and deposits, rather than investment, while large companies access equity and bond market funding to deleverage bank borrowing."
http://money.uk.msn.com/news/mortgage-approvals-at-16-month-high
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