A pick-up in the amount of remortgaging pushed total lending on properties in September up to its highest monthly total in 14 months, a survey found today.
The British Bankers' Association revealed that gross mortgage lending was £17.8 billion in September, six per cent up on August's £16.8 billion. This was the highest monthly total since July 2004. It added that seasonally- adjusted net mortgage lending - gross lending minus repayments and redemptions - rose by £4.9 billion in August, up from August's £4.5 billion. This was the highest increase of the year and above the £4.4 billion average seen over the previous six months.
"September's upturn in both gross and net lending possibly reflects a delay of the demand normally seen in the late summer, but there is also a stimulus from remortgaging," said David Dooks, the BBA's director of statistics.
"Two-year fixed rate loans taken during the buoyant period of 2003 are maturing now and borrowers are seeking out new options," he added.
Remortgaging rose a monthly 8.3 per cent to £8.5 billion. On a year-on-year basis, remortgaging was up nearly a quarter.
The figures from the BBA are likely to reinforce the view that the housing market is picking up once again following the knock seen over the previous 12 months.
Elsewhere, the BBA said there were 199,031 mortgage approvals in September for a total value of £19 billion. The number of approvals was two per cent higher than both August and September 2004. The average approval for house purchase remained at £130,500.
The picture on unsecured borrowing was a bit more subdued, with net lending on loans and overdrafts rising by £0.4 billion in September, following the £ 0.7 billion recorded in August. The September rise was in line with the previous six months.
Net lending on credit cards rose by £0.1 billion, also in line with the average increase in the previous six months. "The outlook for borrowing remains subdued, with card usage modest compared with previous years," said Mr Dooks.