Mortgage approvals by the UK banks have hit a five-year high to almost 67,000 in September, amid decreasing borrowing costs, according to a data by the Bank of England.
The increasing approval for new home loans is likely to fuel the UK mortgages market, which has faced sluggish demand in recent times.
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The British government initiative to Funding for Lending Scheme has also played a key role in bolstering the country’s housing market refinancing activities, which witnessed prices decline by a fifth in cash terms after the financial crisis of 2008.
According to an estimate, the number of home loan approvals increased by 5.2% to 66,735 last month, the highest since February 2008.
The demand in home loan also pushed business lending to £0.72bn in September, after falling by £3.7bn in August, although it was mainly concentrated towards larger firms.
Royal Bank of Canada (RBC) chief UK economist Jens Larsen was quoted by Reuters as saying that a further pick-up in housing market activity is in the pipeline.
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By GlobalDataCommenting on the mortgage market financing activities in the UK, Larsen told the news agency, "But we think it unlikely that this will change the Bank of England’s view that this is anything other than a gradual recovery in house prices, at least for now."
