Sector: Property

In an encouraging sign for the bowed property sector, the number of new mortgages approved by banks rose slightly in October compared with September.

Latest figures unveiled by the British Bankers’ Association (BBA) reveal a rise in mortgage approvals from 42,073 in September to 42,238 in October, reflecting the continuing, albeit modest, activity increase in the housebuying market since the start of the year.

Support for the trend arrived in the form of statistics unveiled by HM Revenue & Customs that revealed a further rise in house sales to 90,000 in October, some 10,000 north of the September figure and more than double the 41,000 low recorded in January.

While representing a positive sign, it should be noted that sales for the third quarter of 2009 were still less than half the level of the comparable quarter in 2007, before the credit crunch began. And although the value of all mortgage lending is growing, other forms of personal bank lending are declining, and the outlook remains relatively weak.

As Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, explains, the lack of supply of property coming onto the market ‘is proving to be an increasingly important obstacle to a more meaningful pick-up in transaction levels’. He adds that ‘the number of new instructions will remain fairly subdued into the year-end’.