UK mortgage approvals rise 25% in November, BBA reveals

The number of UK mortgage approvals in November rose 25% to 76,295 compared to a year ago, according to the British Bankers’ Association on Thursday.

Approvals were supported by a 20% jump in loans for house purchases to 44,960, although it missed analysts’ estimates of 46,000.

Remortgaging surged 31% last month to 23,446 approvals, the BBA added, as people took advantage of record low interest rates and government schemes for house purchases.

Gross mortgage borrowing rose 28% to £12.8bn, with monthly new lending the highest in seven years.

“After seeing demand fall in the second half of 2014, the overall mortgage stock has recovered and is now 2.1% higher than a year ago,” the report said.

Meanwhile, high street banks’ credit card borrowing was 5.5% in November, exceeding growth in the wider credit card market which grew at an annual rate of 3.9%.

Net borrowing by companies fell by £0.3bn in November as increased borrowing by the construction, and wholesale and retail sectors was offset by falls in borrowing by the real estate, transport, electricity and manufacturing sectors.

"This will fuel concern that consumers are borrowing more and saving less to finance their spending, which is likely a consequence of relatively high consumer confidence and extended low interest rates," said Howard Archer, chief UK and European economist at IHS Global Insight. "This is something that the Bank of England needs to keep a close eye on, and it does appear that some MPC members are becoming more worried."