BoE: Mortgage lending up by £1.8bn

Mortgage lending increased by £1.8bn in January, the highest amount since February last year, the Bank of England has reported.

Its figures showed that lending was 0.1% up on December, while the 12-month growth rate unchanged at 0.7%.

January's total of a £1.8bn rise in lending compared to the previous six-month average increase of £0.5bn

The Bank of England revealed that the number of loan approvals for house purchase increased to 45,723 in January, up from 42,719 in December, but remained below the previous six month average of 46,686.

Approvals for remortgaging increased in January to 33,498 compared to 31,561 in December and up on the previous six month average of 30,407.

The figures also showed that approvals for other purposes rose slightly to 20,460 in January, but were lower than the previous six month average of 22,908.

Brian Murphy, head of lending at independent broker Mortgage Advice Bureau, said that an up-tick in purchase and remortgage activity was likely after a subdued housing market in December.

However, he added: "Unfortunately, many people want to remortgage but can't because they have insufficient equity or are not deemed an acceptable risk, despite having a good credit history.
 
"There has been no let-up in lenders' risk assessment and this will continue to place downward pressure on the mortgage market in the months ahead."