New monthly mortgages total hit six-year high

New mortgages hit £12.2bn in April, the highest monthly total since August 2008, data from the British Bankers’ Association has revealed.

Since the turn of the year, the overall mortgage stock has started to rise as higher demand feeds through.

This contrasts with monthly contractions in net borrowing through much of 2013 resulting from new borrowing being more than offset by elevated capital repayment, in part reflecting homeowners switching lenders.

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Richard Woolhouse, chief economist at the BBA, said: “Our figures show that the housing market is mixed. The value of mortgages taken out in April was the highest for six years however looking ahead mortgage approvals have fallen three months in a row.

“The amount of borrowing is however still well below the levels we were seeing before the financial crisis.”

The BBA statistics come after the Council of Mortgage Lenders admitted last week that there may be some disruption to the monthly pattern of mortgage activity while the Mortgage Market Review procedures bed down.

The CML reported gross mortgage lending in April was 8 per cent more than in March and 36 per cent up on April last year (£12.2bn).

The CML and BBA statistics come as the Bank of England revealed if the Mortgage Market Review failed to dampen the market and stem rises in property prices it may be forced to step in.

Mark Carney, the governor of the Bank of England, said in a televised interview that capping the size of mortgage ratios to salaries was one measure the bank was considering to controlling the housing market.