Sharp rise in first time buyer mortgage approvals

A large number of mortgage approvals rose to the high levels since early 2008 The number of first time buyer mortgages approved for house purchase rose by 3,000 during the month to 56,000.

Mortgage approvals are a positive indication of short term investments trends in the real estate market, and have risen this year in line with recovery.

“Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market,” said Adrian Coles, of the Building Societies Association (BSA). However, lending is still at levels much below that of previous years, and the slight recovery remains fragile,” he warned.

The surge of property sales seems likely to continue for the time being and early next year, however, other forms of personal borrowing are still in decline. Consumer borrowing fell by another £300m in September, after falls of £400m and £300m in August and July respectively.

Within this, credit card borrowing held up, albeit with low levels of growth.
But other forms of personal borrowing, such as corporate bank loans, car loans and hire purchase agreements, have fallen.

Under the combined impact of the recession and the credit crunch consumers have reined in their spending while lenders have become fussier about to whom they will lend.
In fact non-credit card personal borrowing has dropped in eight out of the past nine months.
This has been the longest stretch of contracting lending since the business Bank‘s records started in 1993.