Homeowners baulk at costs of moving

Homeowners are getting better mortgage deals

The strong property market is prompting increasing numbers of homeowners to build extensions, rather than move house, bankers have said.

This could be a reflection of a continuing resistance to paying the current going rate of property

Simon Pitkeathley, director, BBA

Only about half the mortgages agreed in September were to support house purchases, the British Bankers' Association (BBA) said.

"This is a continuation of a trend we have seen for some time now," said BBA executive director Simon Pitkeathley.

He said some people could be choosing to build an extension rather than move to a bigger property.

"This could be a reflection of a continuing resistance to paying the current going rate of property," he added.

Car loans

Another reason for the increase in new loans for existing homeowners was that people were taking advantage of better deals.

Total mortgage lending amounted to £13.1bn ($20.3bn) - lower than August's £14.3bn figure, but 34% higher than in September last year.

Even though the total amount was lower, the number of new loans was slightly higher than in August.

The BBA said that consumer credit rose by £313m, up from a recent average of £250m.

And new spending on credit cards rose slightly to £5.959bn.

Mr Pitkeathley said that loan demand for new cars had contributed to the increase in borrowing.