By Dow Jones Business News, October 29, 2013, 06:05:00 AM EDT
LONDON--The number of new mortgages approved in Britain rose in September to its highest monthly total for more than
five years, Bank of England data showed Tuesday, in a further sign a recovery in the housing market is gathering
The BOE said there were 66,735 new home loans approved in September, up from 63,396 a month earlier and the most since
The data showed interest rates on most new and existing home loans tumbled to new lows in September, while gross
mortgage lending during the month was 15.6 billion pounds ($25.18 billion), the highest total since October 2008.
The data suggest government efforts to spark a revival in mortgage lending and spur greater activity in the housing
market are bearing fruit. The central bank and Prime Minister David Cameron's coalition government have launched a range
of initiatives to boost mortgage lending, including a cheap funding program for lenders and taxpayer guarantees for
borrowers without the cash to make a large downpayment. Critics warn the policies risk stoking a new bubble in prices.
BOE data show lending to businesses, particularly small firms, continues to lag the improvement in the supply of
credit to consumers. Lending to nonfinancial firms, net of repayments, rose just GBP720 million in September, while net
lending to small and midsize firms fell by GBP383 million.
Policymakers fret that a shortage of loans for businesses is stymieing investment and holding back economic growth.
BOE Governor Mark Carney, in a speech Thursday, said the central bank is working on new ways of improving the supply of
credit to small companies.
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