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THE volume of mortgages approved by most of the high street banks rose to its highest level for nearly two years last month.

The British Bankers’ Association announced that 42,238 mortgages were approved in October – nearly double the number seen last October at the height of the crisis. This was a slight increase on the September figure of 42,073.

Net mortgage lending, held firm at £3.1bn, but unsecured lending remained subdued as consumers focused on paying down their debts and building up savings.

Demand for personal loans has been low, with outstanding balances falling by £2.9bn in the first three quarters of the year.

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

Howard Archer, chief UK economist at IHS Global Insight, said he suspected that the recent firming in house prices would fizzle out before long.

“This will be even more likely if recently higher house prices lead to more properties coming on to the market,” he said.