Drop in mortgage approvals

29 September 2006

The Bank of England has reported a slight drop in the number of mortgages approved in August. Officials say the figure was lower than in July, but added that approvals for re-mortgaging were in line with July’s figures.

It said the increase of £9.9 billion in total net lending to individuals in August was lower than the increase in July, but in line with the previous six month average.

One leading economist, Milan Khatri of the Royal Institution of Chartered Surveyors, said: “Despite a slight drop in mortgage approvals in August, activity is still at high levels and housing demand is robust. August mortgage approvals were 119,000, compared with 120,000 in July – but 16% higher than the average for the past decade.”

He added: “We expect… the recent upward spurt in the market to be sustained, though further interest rate rises remain on the cards for November.”