Mortgage approvals reach a high

There were 62,226 approvals for home loans in August, the Bank of England said, up from 60,914 in July and the highest level since February 2008.

But loans to small firms continued to slide, slumping by £648m during the month and 3.2 per cent over the year, as attempts to unblock the credit log-jam falter.

Net lending to firms big and small dropped by £3.8bn during the month to hit the lowest level since December 2012, showing Britain’s nascent recovery is yet to feed through to higher business borrowing.

Prime Minister David Cameron this weekend revealed plans for an early roll-out of the second stage of the Government’s Help to Buy scheme, which will underwrite 15 per cent of the value of a mortgage, allowing people to buy properties with a 5 per cent deposit.

The launch is expected within weeks, three months ahead of schedule, and follows the first stage of Help to Buy which offers equity loans on newly-built properties.

The scheme has sparked worries over a new housing bubble, but Samuel Tombs, economist at Capital Economics, said the figures show the mortgage market remains “relatively weak”, with home loans 40 per cent off their pre-crisis levels.