Figures show mortgage borrowing on increase
Homeowners' mortgage borrowing increased in September while the number of loans approved for house purchase also grew, new figures have revealed.
Net lending, which strips out redemptions and repayments, reached £922m, according to the Bank of England, but the figure was weaker than August's revised £1.28bn.
The number of mortgages approved for house purchase rose to 56,215 from the previous month's figure of 52,970, suggesting the recent improvement in the housing market will continue.
The figures show a downward revision of July's data, indicating that homeowners repaid £292m more than was advanced in the month. This was the first time lending had been negative since the Bank began collecting data in its current format in 1993.
September's mortgage approval numbers are the highest since March last year.
But there was a further fall in the number of homeowners remortgaging, with those switching to a new deal dropping by 10% compared to August, to 25,528.
Overall lending through unsecured credit, such as credit cards, loans and overdrafts, was negative for the third month in a row.
Consumers repaid £262m more than they borrowed through unsecured debt in the month.
Within this total, outstanding credit card debt rose by £79m — a nine-month low — while money owed on loans and overdrafts fell by £341m.
Analysts said that while the mortgage figures were positive, they should not be viewed as a sign that the housing market was out of the woods.
Howard Archer, chief UK and European economist at IHS Global Insight, said the figures implied that mortgage activity “continues to firm” from the record low seen in November last year.