Home loan demand at two year high

Mortgages approvals are booming along with the housing market

Mortgage approvals are running at their highest level for two years, according to official figures.

The Bank of England said that 126,000 mortgages were approved for home purchase in September - up 6,000 on the previous month.

The figure exceeds some analyst expectations and is yet another sign of the UK's buoyant housing market.

But, the numbers of people remortgaging their homes fell slightly between August and September.

Total net lending to individuals grew by £9.9bn during September - an increase of £0.4bn on the previous month, the Bank said.

Jonathan Loynes, chief economist at Capital Economics, said that the high level of mortgage approvals meant that house price inflation was unlikely to cool anytime soon.

"Approvals were stronger than anticipated in September," Mr Loynes said.

"They are a clear indication of demand and are also a good predictor of where house prices will go in the next three to six months. House price inflation will continue at a high rate."