Published on : Tue, 01 Nov 2005 18:32GMT
by : David Parker

LONDON - The Bank of England has revealed that its latest survey shows that the number of mortgages approved increased in September, underlining the fact that the UK housing market is strengthening by the day.

The official figures show that around 107,000 loans were approved in the month as compared with the 86,000 that were approved at the same time last year. This year's figure is also the highest since June last year. The overall value of the mortgages approved but not lent hit £27.04 billion.

This is again the highest since November 2003 at a time when the property market was going strong.
"This adds credence to the notion that the housing market has stabilized, with lower interest rate expectations one month ago keeping potential housebuyers plentiful," commented Jonathan Said, an economist at the Centre for Economics and Business Research. The actual amount lent in September increased from £7.6 billion to £7.7 billion.

However, the news was not so good on the credit front as the Bank's figures showed that consumer credit, such as loans, credit cards and hire purchase agreements grew by 10.9 percent. This is the slowest at which they have grown since November 1994.

The rate at which Britons borrowed on credit cards, loans and overdrafts fell slightly to £17.79 billion. The total outstanding unsecured debt stood at £1.25 billion after repayments were taken into account.

Howard Archer, economist at Global Insight felt that the September figures revealed the continuing consumer caution, "This reinforces our belief that consumer spending will remain subdued for some time to come despite September's pick-up in retail sales."