Applications for winter mortgages have increased says BBA

According to the British Bankers' Association gross lending on mortgages by major UK banks reached its highest monthly level for the year, in December 2011.

Lending for mortgages shows a 12 per cent year on year increase from December 2010. However, a continued cautious approach is being seen with other forms of borrowing. Repayments on unsecured lending matched the amount of new borrowing on loans, overdrafts and credit cards.

The BBA statistics director David Dooks has said "The household sector generally is focusing on debt repayment amid inflated household expenses and a continuing air of uncertainty, so we see a reluctance to let net borrowing rise, with people preferring to use their bank account cash for expenditure."

The figures show that mortgage market activity remained at the low levels of the previous two years despite a pick up in gross mortgage lending in December 2011. The number of mortgage approvals for house purchases by High Street banks increased to 36,171 in December compared with November, although remortgaging dropped back slightly in the same period.

According to the BBA, over the entire year the number of mortgages approved for house purchases was very similar to 2010. The number of approvals for remortgaging was up 3 per cent compared with 2010 and average house purchase values remained similar to 2010, at £145,200.