Mortgage approvals hit 21-month high

Approvals for house purchase rose to 42,238, which was slightly higher than September's figure of 42,073. They have jumped by 97.7% compared with October last year.

The number of remortgages dropped 1.7% in October from 21,054 in September to 20,685 in October.

Net mortgage lending in October remained at £3.1bn, the same amount as in September. Gross mortgage lending rose to £9bn, up from £8.9bn in September, which was higher than the £8.4bn average over the previous six months.

David Dooks, statistics director at the BBA, said: "The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution."

Simon Rubinsohn, chief economist at RICS, said access to the property market remained challenging.

He added: "Although the availability of finance for homebuyers has increased a little in recent months with some evidence of a modest relaxation in the strict control on loan to value ratios for first -time buyers, access to the property market still remains challenging particularly given the rebound in residential prices in recent months."

David Whittaker, managing director of Mortgages for Business, said the figures showed that people are waiting for something to happen.

He said: "The market needs a shot in the arm and these figures show that quantitative easing and low interest rates are not cutting it. Low rates mean inflation is an ever looming danger.The market cannot carry on in this limbo and it is up to lenders to lend on more reasonable terms and jump-start the recovery."