The housing market was given a further boost yesterday when the British Bankers' Association released figures showing that the number of mortgages approved jumped to the highest level for more than two years in December.
During November 60,518 loans for people buying a new home were in the pipeline, the highest level since March 2008 and more than double the record low of 27,162 seen in November of that year.
In a further sign that the housing market is continuing its recovery, total mortgage advances rose by 6 per cent during the month to reach £10.2bn, a level last seen in November 2008.
The BBA credited the jump – which came during a month when the mortgage market traditionally slows – on people racing to complete home purchases before the end of the stamp duty holiday on properties costing up to £175,000.
Unsecured lending remained slow in December and, while savings levels bounced back, for 2009 as a whole they were weak, with consumers concentrating on paying down their debt during the downturn. David Dooks, BBA statistics director, said: "The high-street banks continued to lend substantial amounts in the weaker mortgage market of 2009, approving more than 440,000 loans for house purchase."
It came as the City watchdog launched a crackdown on the way lenders handle people in arrears. The Financial Services Authority said lenders must consider "all options" for borrowers and make repossessions a last resort.
They must not apply a monthly arrears charge if the customer has entered an arrangement to repay the arrears, or include arrears charges when calculating a borrower's early repayment charge.
Cash from customers in financial difficulties must be applied to clearing the missed monthly payments before being applied to arrears charges, and firms will be obliged to record all arrears-handling telephone calls and keep records for three years.
The FSA in December said that by the end of September last year 395,000 mortgage accounts were in arrears. Specialist lenders have been the most aggressive when it comes to charging arrears fees.Reuse content