Mortgage approvals at two-year high

30 October 2006

Official figures show that mortgage approvals are running at their highest level for two years. According to the Bank of England, 126,000 mortgages were approved in September - that’s up by 6,000 on the previous month.

The Bank said that total lending to home buyers grew by £9.9 billion during September, which is an increase of £0.4 billion on the previous month.

These figures exceed most analysts’ expectations. They’re yet another indication of the buoyancy of the UK housing market.

One leading economist - Jonathan Loynes of Capital Economics - says the high level of mortgage approvals means that house price inflation is unlikely to cool in the near future. He said: “Mortgage approvals were stronger than anticipated in September. They’re a clear indication of demand and are also a good predictor of where house prices will go in the next three to six months.” He added: “House price inflation will continue at a high rate.”