Mortgage approvals reach their highest 2010 levels

Mortgage approvals are at their highest level this year, up by 11 per cent in this period to £1,735 million in June.

Adrian Coles, director general of the BSA, said the rising number of approvals was a positive indicator for coming months, however he was concerned that the forthcoming public sector cuts may add to the economic uncertainty.  He said: "This could constrain any significant growth in mortgage lending in coming months."

 Mr Coles was encouraged by the savings balances deposited in mutual lenders, which increased by £16m in June, compared to a reduction of £373m in May.

 He said: "Yet it will remain challenging to attract savers whilst the bank rate remains low and the tough economic climate puts added strain on household finances."

For data relating to January 2010 onwards, the Bank of England has combined figures for building societies and mutually owned banks. This new data is reported as the 'mutual sector'.