UK mortgage approvals near six year high in October Amid renewed concerns that Britain's economic upturn is being fuelled by debt, Bank of England data yesterday showed total net lending in the UK increased by £1.7bn in October, following an rise of £2.2bn in September. Including mortgage payments, Britons now owe a total of £1.4296 trillion, or around £22,000 for every man, woman and child in the UK. The previous high was £1.4294 trillion in September 2008, when Lehman Brothers collapsed. The data were released a day after the Bank of England announced it would pull the plug on one half of the Government's Funding for Lending Scheme (FLS) amid fears of overheating in the housing market. Incentives for banks to provide mortgages as part of the FLS will end next February, and focus exclusively on business lending. Resurgent property values have raised fears of another housing bubble, caused in part by the Help to Buy scheme, which provides Government subsidies on loans for borrowers with small deposits. However, economists said it was too early to gauge the impact of Help to Buy. "Surveys of new buyer enquiries point to a further pick up in mortgage lending ahead," said Samuel Tombs, an economist at Capital Economics. That said, with banks still cautious about who they lend to, we doubt that lending will return to pre-crisis levels or amounts that could facilitate another housing market bubble soon. Overall business lending fell £1.1bn in October, after climbing £0.72bn in September, the Bank said yesterday, largely due to businesses paying back money on their overdrafts. Almost half of the fall was due to a decline in SME loans. Excluding overdrafts, gross lending to SMEs climbed 24pc to £4.1bn, though net lending fell by £200m. Rob Wood, chief UK economist at Berenberg bank, said a sustained rise in business lending would provide "the missing link that could make this recovery much more sustainable." Meanwhile, mortgage rates fell to a record low in October, . The effective interest rate on all mortgage lending fell to 3.28pc in September, from 3.3pc in August, the lowest rate since records began in 2004. Average rates on new mortgages also fell to a record low of 3.04pc, from 3.09pc in August. The average savings rate was 1.71pc in October, unchanged from the record low set in August.