Mortgage approvals hit 5 year high in UK

The United Kingdom saw its highest number of mortgage approvals in five years, since before the world-wide financial crisis precipitated in large part by a burst housing bubble.

While analysts said the numbers of approved loans were still below pre-crisis levels, mortgage approvals rose to 62,226 in August, over 60,914 the month before, according to a report released Monday by the Bank of England.

The news came on the heels of the announcement of the second phase of the Help to Buy program, the first phase of which began in April to help buyers of new homes. The second phase expands the program to existing homes.

Help to Buy guarantees new mortgages to give lending banks more confidence, and allows buyers to put down a deposit as low as 5 percent.

Prime Minister David Cameron, in launching the second phase of the program, rejected fears it could inflate a new housing bubble. The housing market was "recovering from a very low base" and first-time buyers need help to get into the market.

A Hometrack report found prices of homes rose 0.5 percent in September and 0.4 percent in August, bringing the increase on the year to 2.4 percent.