Other mortgage approvals remain subdued and households are generally cautious, continuing to reduce their borrowing and build up deposits.
Gross lending of £26.1bn in the third quarter of 2009 was 7% higher than in the second quarter, but was still 32% lower than in the same quarter of 2008. Gross lending is understandably lower now, because of significantly reduced remortgaging activity. The annual growth rate of 4.6% in the banks' mortgage lending substantially exceeds growth of just 0.8% across the whole market.
The number of house purchase approvals has risen steadily in the last eight months with an average value some 7% higher than a year earlier. Remortgaging is less likely in the current environment, where reverting to standard variable rates may be more attractive than alternative deals. Approvals for equity withdrawal ticked up slightly in September.
BBA statistics director, David Dooks, said: “Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover. Housing market activity will depend, however, on more properties coming on to the market. Apart from property decisions, further symptoms of subdued consumer confidence are a reduced appetite for unsecured borrowing and more saving.”