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Record low rates keep approvals on upward trend

By Roger Baird

Published 27/10/2015

Homebuyers are taking advantage of low interest rates
Homebuyers are taking advantage of low interest rates

Mortgage borrowing jumped to £12.1bn last month as homebuyers continue to take advantage of record low interest rates, a report has said.

The British Bankers' Association (BBA) said gross mortgage borrowing leapt by 17% in September compared to a year ago, as the UK's 0.5% interest rates look set to remain into 2017.

But the report also unexpectedly showed that, on a seasonally adjusted basis, UK banks approved the fewest mortgages last month since May.

Mortgage approvals for house purchase fell to 44,489 in September from 46,567 in August, but were 14% up from the same time a year ago, the BBA said. It also showed that net credit card lending and lending for personal loans and overdrafts all fell from the previous month.

The BBA data is generally a good guide to spending and mortgage trends, but do not include building society lending, which accounts for almost a third of mortgages.

Pantheon Macroeconomics chief UK economist Samuel Tombs said: "September's fall in the British Bankers' Association's measure of mortgage approvals for house purchase is likely to be a blip in an otherwise steady upward trend."

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