London, United Kingdom (4E) – The monthly mortgage approvals in the UK increased in August to its highest level in more than five years, according to a Bank of England (BoE) report released Monday in London, further sign that the housing sector recovery is gaining steam.
In August, a total of 62,226 mortgages — the highest since February 2008 — were provided by lenders, compared with the previous month’s revised figure of 60,914, the BoE said in its monthly report. While the volume of home loans improved, business lending fell to an 8-month low in August.
Hometrack reported Monday that home prices gained the most in more than six years in September. Last Sunday, British Prime Minister David Cameron said the second phase of his mortgage plan will begin in a few days, bringing it forward by three months.
This month, the new-home loan average annual interest rate dropped to 3.15 percent, falling to its new record low since data was first compiled in 2004. Net of repayments, total lending to consumers rose by 1.6bn pounds ($2.58bn) in August, with secured and unsecured borrowing higher.
However, lending to businesses continues to fall, a sign that there are concerns about the prospects of hiring and new investment. The BoE also said that net lending to nonfinancial firms fell by 3.8 pounds in August.