Mortgage approvals rebound in May

Figures from the British Bankers Association (BBA) show that 81,000 new mortgages were approved for home buyers, up from 65,000 in April.

Although the difference is partly explained by April's fewer working days, May still marked a 20% rise on the same period in 2005.

Mortgage approvals are a good indicator of trends in the property market, and suggest the market will stay buoyant.

Recent figures from the BBA and organisations such as the Council for Mortgage Lenders and the Building Societies Association showed that mortgage lending was running at record levels.

The BBA's director of statistics David Dooks said: "Although numbers of approvals are still well below the levels of early 2004, the record level of gross lending and stronger net lending in May shows mortgage market activity to be healthy."

Recent surveys from lenders such as the Nationwide and the Halifax suggested that house prices hardly rose at all in May.

But Howard Archer, chief economist at Global Insight, commented: "The robust BBA mortgage lending and approvals data for May indicate that the housing market upturn is still alive and kicking.

"Following some recent signs that it could be starting to falter. This suggests that house prices will see further strength in the near term at least."

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