Slight Rise For Mortgage Lending

Approvals for home loans, especially remortgages, have shown a slight increase in the November period of 2010, according to the Bank of England (B of E)figures.

The number of mortgages approved showed a marginal rise but remortgages were approved by nearly 4,000 more to 34,262.

However, this rise still stayed below the 6 month average of 48,145 which still indicates subdued lending at the end of 2010.

A key cause for this is the decreased or lack of demand from first time buyers although market data indicates an increase in the availability of loans for those with a 15% deposit.

In December 2010 the British Bankers Association (BBA) reported that house purchase approvals had fallen to a 20 month low in terms of loans by major UK banks.

The B of E data provides a more complete picture and when both sets of figures are combined they show that maturing deals being replaced with remortgages has picked up the market somewhat.

"The sharp increase in the number of remortgages shows that consumers are becoming far more wary of potential interest rate rises given the growing inflation threat. Increasingly, the belief is that Bank rate will rise this year and not next," said Brian Murphy, head of lending at mortgage broker, the Mortgage Advice Bureau.