UK Mortgage Approvals Reach Record Level in October

In its report “Lending to Individuals 2009”, published on November 30th, the Bank of England showed that mortgage approvals in the United Kingdom reached their highest level in 19 months in the month of October and that the pace of debt repayment by UK borrowers is extremely fast.
According to the report, the number of mortgage approvals in the UK grew to 57,345 in October, up from 56,205 in September. Bank of England’s estimates, which apparently differ from the estimates of the British Bankers’ Association, which we published earlier, suggest that UK mortgage approvals not only hit their 19-month high, as the figure is the highest ever since March 2008, but also marked 11th consecutive month of growth.
Bank of England also said that the number of mortgage approvals at the same time last year was 78.5% lower.
In addition to data on mortgage approvals, the report published by the Bank of England featured information on debt repayment in the UK. According to the Bank’s figures, UK borrowers, being concerned with potential job losses and deepening recession, tend to repay their debt very fast.
In the month of October, total unsecured debt was reduced by the Brits by as much as £579 million; this includes loans, credit card and overdraft debt. The figure represents the highest debt reduction ever since 1993 – the year when the Bank of England began to keep its records in the modern form. Also, October marked the second month in the history of Bank of England’s records, when loan repayments outperformed new borrowing.
In the opinion of Howard Archer, leading IHS Global Insight economist, Bank of England’s data suggests that the recovery of the UK economy is continuing at a rapid pace as the increased level of mortgage approvals, coupled with low interest rates and house prices, indicates firm mortgage activity.