At the end of 2009, home loan approval rates had hit an 18-month high, giving some indication that the recession may be coming to an end and the credit crunch is easing.

According to data from the British Bankers Association, over 42,000 home loans are being approved each month. This is good news and many hope that this is a sign that banks are finally starting to loosen the home loan market, and that at last, the housing prices are starting to go up. In fact, the approval rates for a home loan have actually doubled since the end of 2008.

According to Howard Archer, the Chief Economist at forecasters IHS Global Insight, with lower home prices and interest rates, more people are interested in buying a new home. Although the change is gradual, these buyers are helping to lift the housing market and the economy.

Until recently, the first time buyer has found it nearly impossible to get a home loan. The banks were demanding very large deposits and charging outrageous interest rates. Those who were looking to buy their first home found that they just could not qualify for a loan. Another group of people that found that they were pushed out of the market were those that have less than perfect credit histories, even if the problems with their credit were minor.

With lenders beginning to loosen up on mortgages, they have started a war to offer the best interest rates. This will allow people who could not get a home loan in the past year or two, to possibly get approved for a mortgage at an affordable rate.

Not all the news on home loan approval is good though. Getting a loan to refinance your home is as difficult as it was last year. The rate of approval on these types of loans has remained relatively the same.

Some additional news in the lending market includes the fact that fixed rate mortgages have continued to drop, while tracker mortgages are actually on the rise. One of the reasons why more borrowers are taking the tracker home loan option is that they believe that interest rates will stay fairly low in the foreseeable future.

Though interest rates for those people who have large deposits are low, this may not be the case for buyers who have not been able to save up a large sum of money to use as a deposit. The increase in approval rates can basically be attributed to these buyers that are fortunate enough to get a home loan mortgage at a low rate, though first time buyers are finding it a little easier to get approved now.

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