The number of mortgage approvals in September was 24% higher than a year ago, the British Bankers’ Association (BBA) has revealed.
Remortgaging was up 40% and house purchases up 14%.
In addition, gross mortgage borrowing in August was £12.1 billion. This was 17% higher than a year ago.
Bank lending to companies decreased in September and continues to be subdued. Net capital market finance has grown by £16 billion in 2015 so far, with larger companies using it as an alternative to loans and overdrafts.
Richard Woolhouse, chief economist at the BBA, said: “Borrowing figures in the mortgage market remain strong as customers take advantage of record low interest rates. In particular, remortgaging remains high as savvy customers secure attractive deals ahead of a possible rate rise.
“Credit card purchases were 6% higher last month than a year ago. Buoyant consumer confidence and rising wages may well be playing a role here.”
Richard Sexton, director of e.surv chartered surveyors, added: “The housing market has much more energy than last year – thanks to the recent growth in small deposit lending. Rising wages have given first-time buyers a helping hand onto the ladder. The economic recovery is strengthening and borrowers have more mortgage options at their fingertips.
“Low interest rates are encouraging borrowing across all aspects of the market, and pushing up remortgage approvals in particular. As a rate rise again becomes a matter of debate, it is the ideal time for borrowers to search for the best deals.
“However, these favourable financial conditions may not be enough to combat increasing house prices over the long term, so to help carry momentum through to next year, the government can assist by delivering on its promises on housebuilding – and satisfy rising demand.”
