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Mortgage lending edged up in September, figures published by the Bank of England showed today.
The value of net mortgage lending, which takes into account repayments and redemptions, increased by £2.2bn compared with a fall of £0.7bn in August. Lenders approved 33,000 loans in September, up from 32,000 in August.
However, the figures are still considerably below the previous six-month average, reflecting the continued shortage of funding for buyers. Mortgage lending increased by £3.5bn a month on average over the previous six months, and an average 43,000 loans were approved for home purchase each month.
There were 72,000 remortgage loans approved in September, up from 64,000 in August but still very low compared with an average of 82,000 over the previous six months.
Howard Archer, chief UK economist at Global Insight, said the data remained "very weak."
"Despite the very limited improvement from August, the Bank of England mortgage data for September still showed that housing market activity continued to be decimated by the highly damaging combination of stretched buyer affordability and tight lending practices," he said.
"Together with the deepening economic downturn, this reinforces pressure on the Bank of England to cut interest rates by at least a further 50 basis points from 4.5% to 4.00% at its November policy meeting next month."
Meanwhile, consumer lending through personal loans and credit cards increased by just £0.3bn compared with an increase of £1.1bn in each of the previous six months.
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