Mortgage approvals bounce back, Bank of England data shows

The Bank of England has revealed that mortgage lending picked up the pace again in November, rising by the largest amount since February 2008.

Mortgages increased by £3.9bn in November, with numbers of approvals for house purchases climbing back up to 70,410, from 69,867 in October and above the average of 68,428 over the previous six months.

November's approval number was just shy of the 19-month high of 70,864 seen in August after which it fell to 69,168 in September and rebounded slightly the month after.

The Bank's Money and Credit report showed the number of approvals for remortgaging was 39,161, cooled slightly on the previous month but pretty much in line with the average over the previous six months.

Total lending to individuals increased by £5.3bn in November, compared to the average monthly increase of £4.4bn over the previous six months.

The BoE also reported that gross mortgage lending hit £20.3bn in November, up from £20.1bn in October and the highest monthly levels since mid-2008 thanks the high level of re-mortgage activity as house-owners look to lock in low mortgage interest rates before the Bank starts raise interest rates.

"The Bank of England data suggest that housing market activity is still pretty buoyant, although it appears to have levelled off recently," said economist Howard Archer at IHS Global Insight.

"It is notable that while the latest RICS survey indicated that buyer enquiries rose for an eighth successive month in November, the rate of increase has slowed recently and in November was at the slowest rate since April."

Ruth Miller at Capital Economics noted that while recent lending growth has been driven by households, corporate lending has been staging a gradual recovery, recording its third consecutive month of positive annual growth in November.

"Looking ahead, we expect bank lending to provide increasing support to the economic recovery," she added.

Brian Murphy, head of lending at advisory firm Mortgage Advice Bureau, said the second successive monthly increase indicated there was "no sign of a winter slowdown".

“Lenders’ appetite for new business grew significantly over the course of 2015, and this is expected to continue into 2016," he said.

"This means those who meet affordability criteria will continue to enjoy the excellent deals available in the marketplace. However, overall housing supply continues to be constrained, and it is important that housebuilding targets are met in order to ensure an inclusive market.”