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September 30, 2013 10:47 am
Mortgage approvals in the UK last month soared to their highest level since the collapse of Lehman Brothers, according to Bank of England figures published on Monday.
The BoE said lenders approved 62,226 mortgages in August, up from 60,914 in July and the highest since February 2008. The amount of remortgages approved also rose to 36,225 – its highest level since February 2011. Though both figures are high by recent standards, approvals remain well below the levels seen at the peak of the housing boom.
In August, mortgage borrowers owed a total of £1.27tn on their homes – a figure virtually unchanged from July.
The data come amid concern government policies to spur mortgage lending risk stoking another property bubble.
It emerged last week that George Osborne, chancellor of the exchequer, is to give the BoE powers to place an emergency brake on his Help to Buy scheme, unveiled in March, should signs of a bubble emerge. The BoE will be able to recommend that Mr Osborne lower the £600,000 cap on properties eligible under the scheme to reduce its availability to would-be homeowners wishing to enter London’s booming property market.
David Cameron, prime minister, said on Sunday that he would expedite the second phase of the scheme, which allows buyers of properties valued at £600,000 or less to borrow with a deposit of 5 per cent of the property price with the support of a government loan.
The BoE’s release on lending conditions showed that the amount borrowed by households increased by £1.6bn to £1.43tn. The amount of loans to businesses fell £3.8bn to £454.5bn.
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