There was a slight increase in home loan approvals in September, but low remortgage levels left overall loan figures substantially below last year’s.

The number of mortgages granted for house purchase rose to 42,088, the British Bankers’ Association (BBA) said yesterday. This was a 76.8 per cent rise on the same month last year and a 3 per cent rise on August.

David Dooks, the BBA statistics director, said: “Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover. Housing market activity will depend, however, on more properties coming on to the market.”

The number of loans approved for remortgaging fell by 10 per cent, down from 23,506 last month to 21,282. The overall number of loans approved was down 19 per cent compared with September last year.

Remortgaging has become less common as borrowers opt for lenders’ low standard variable rates rather than search for another deal.

Martin Ellis, chief economist at Halifax, said: “These figures are what we expected — activity in the housing market is improving steadily, but slowly. I suspect we will see a continuation of low mortgage availability for the next few months, at least.”

Mark Harris, managing director of Savills Private Finance, the broker, said of remortgages: “It is actually a great time to lend, if you have money. Borrowers paying 2.5 per cent on a standard variable rate aren’t going to move while interest rates are low. But those paying 4 per cent might well move to a different lender if they saw a decent fixed rate.”

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