The bank of England approved 52,410 new mortgage loans in August, marking the highest number of mortgage approvals since December 2009.

The director-general of the Building Societies Association, Adrian Coles commented: “Approval figures continue to look promising as consumers take advantage of the competitive mortgage rates.” But he also forewarned: “However, the outlook for the economy has deteriorated over the past month as has consumer confidence, which could well spill into the housing market, causing further weakness”

The number of new mortgages approved for home buyers in August was nearly 3,000 more than in July and over than 5,000 more than the previous six-month average.

Meanwhile, the Nationwide reports that: “UK house prices changed little in September” rising by 0.1% in the month but still being 0.3% lower than one year ago.

As new mortgage approvals are expected to continue in the coming months experts believe that sales funded by mortgage loans will see an increase during autumn and this could be reflected in the coming updates to the House Price Indexes across the country.

However, according to the Bank of England’s latest credit conditions curvey (2001/Q3) a lending squeeze to households and small businesses might be imminent due to the eurozone crisis.

According to the Bank’s Q3 survey, lenders “pointed to adverse wholesale funding conditions as a key factor which might constrain future lending.” And recent discussions with some of the major lenders suggested that “although these factors had not yet led to reduced credit availability, a period of sustained tight funding conditions could act to constrain their ability to extend loans going forward.”

Between the rising number of mortgage approvals and the adverse wholesale funding conditions reported by the Bank of England there might be a relatively small window of opportunity before 2012 for households and small businesses to take advantage of an optimal mortgage loan.