Mortgage approvals up 81% in year. From BBC News website

The has been a rise in mortgage approvals over recent months The number of mortgages approved by the major banks in August was up 81% from the same month a year ago when the housing market was in a slump. The British Bankers' Association (BBA) said the annual rise was exaggerated by the low lending levels of a year ago. Approvals for house purchases in August dipped slightly compared with July after seven months of month-on-month rises, the figures show. The BBA said major banks had been more active than other lenders recently. However, the number of homes being put up for sale was low. Consumers cautious There were 38,095 mortgages approved for house purchases in August by the major banks, compared with 21,001 in August last year. In reaction to the economic conditions, consumers appear to be building up their savings and controlling their appetite for unsecured borrowing David Dooks, BBA statistics director A year ago the mortgage market was at an "all-time low", according to David Dooks, the BBA's statistics director. However, the figure actually fell even further in November to 18,330. He said that the annual change was "difficult to understand", but was an "exaggeration" as a result of the combination of the low numbers a year ago and the return to the levels of lending seen at the beginning of 2008. Net mortgage lending rose by £2.8bn in August, similar to the average of the previous six months and a year-on-year growth of 4.6%. During the recession households were not taking on extra debt with jobs at risk and the economic conditions uncertain, Mr Dooks said. "In reaction to the economic conditions, consumers appear to be building up their savings and controlling their appetite for unsecured borrowing," he said. This meant that spending on credit cards and the amount borrowed in personal loans was down in August compared with the previous month. New spending on consumer credit was down 13.6% in August compared with the same month a year ago, at £5.6bn. In terms of mortgage lending, Mr Dooks said that applications to the banks for home loans were generally being approved. Specialist lenders have scaled back their operations considerably in the last year. However, many potential homeowners have been saying that they have been finding it difficult to get a loan, with many needing to put down a large deposit. Sales down The number of mortgages approved gives an indication of future activity and prices because the process comes prior to a new homeowner getting the keys. On Tuesday, HM Revenue and Customs (HMRC) said that the number of homes actually sold in August - 83,000 - was 4,000 fewer than in July, the first drop this year. However, sales were 19% higher than the same time last year. The BBA's David Dooks said that all these factors would lead to a "varied picture" for house prices across the UK. With interest rates still low, the BBA figures also showed that the number of loans for homeowners who were remortgaging was 47% lower than a year ago, at 26,124 in August.