New home loans hit two-year high in UK

The number of mortgages approved for house purchase in the UK reached its highest level for two years during November, figures showed today.

A total of 44,713 loans were approved for people buying a home during the month, 152% above the low point reached in November last year, according to the British Bankers’ Association.

But the group cautioned that the huge year-on-year jump reflected the weakness of the market in 2008, rather than a much stronger market now, although it added that approvals were slightly higher than they were two years ago.

There was also a slight increase in net mortgage lending, which strips out redemptions and repayments, with this rising to £3.3bn (€3.7bn) in November, its highest level since February.

But the number of loans approved for people remortgaging remained subdued, as the low base rate meant many people were better off staying on their lenders’ standard variable rate when their existing deal came to an end.

There were only 22,360 remortgage loans in the pipeline during November, two-thirds lower than in the same month of 2007.