Mortgage lending reaches a 13-month high

The number of mortgages approved for house purchase rose to a 13-month high last month as buyers returned to the property market. The British Bankers Association said 31,162 loans were approved for people buying a property in May, 7 per cent up on April’s figure and 16 per cent higher than in May last year - the first annual increase since November 2006. However, the positive news was tainted by a report from ratings agency Fitch which showed the number of homes in negative equity will rise sharply as house prices continue to slide. The ongoing weakness in the remortgage market dragged down overall lending figures, with total advances of £7.7 billion the lowest since February 2001.