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Mortgage approvals hit four-year high

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The number of mortgages approved for house purchase has reached a four-year high, according to figures from the British Bankers' Association.

Its monthly figures showed that the number of approvals for both purchase and remortgaging rose last month, the former reaching its highest level since 2009.

The BBA said schemes such as Help to Buy and Funding for Lending had allowed more first-time buyers access to finance and this had stimulated activity across the market.

Gross mortgage lending from banks reached £9.3bn in August, the trade organisation said. This figure was up on July and also higher than the £8.4bn averaged over the previous six months.

Net lending continued to contract but the BBA said this was likely because borrowers were taking advantage of low interest rates and overpaying each month.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “However, it is encouraging that many borrowers continue to overpay on their mortgages, taking advantage of low interest rates and paying down debt where they can.

“Confidence may be growing in the housing market but homeowners are reluctant to take on more borrowing while there is still uncertainty with regard to the economic and jobs’ climate.

“Despite talk of a housing bubble, the reality is that we are some way off a sustained recovery, with transactions at far lower levels than at the height of the boom years. However, mortgage brokers and estate agents are reporting high levels of enquiries in September so we expect these to be reflected in improved official figures in coming months.”

Yasin Patel, director of peer-to-peer mortgage lender Mayfair Bridging, said: “Activity throughout the summer months has been surprisingly buoyant.

“We shouldn’t kid ourselves though – mortgage activity isn’t anywhere near pre-2008 levels. But the housing market definitely seems to have turned a corner.

“It will be interesting to see whether the summer spurt has continued into September, which is historically a busy month for house purchases as families return from their holidays.

“It’s probably too early to say that all is well in the housing sector again, but it’s certainly looking a lot brighter than it has done for a couple of years.”

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