UK mortgage approvals hit 11-month high, consumer credit up £1.4bn in January

UK mortgage approvals for house purchases rose to an 11-month-high in January, according to data released by the Bank of England on Wednesday.

The number of loans approved for house purchases jumped to 69,928 from 68,266 the month before, beating expectations of a smaller increase to 68,650 and marking the highest level since February last year.

Howard Archer, chief UK and European economist at IHS Markit, said: "Housing market activity has been helped off the lows seen around August by the resilience of the economy since June’s Brexit vote and the Bank of England cutting interest rates in August and launching the Term Funding Scheme."

"Activity had earlier slowed to its August lows after being buoyed in the first quarter of 2016 by buy-to-let and second home sectors rushing to beat April’s Stamp Duty increase for these sectors. In addition, prospective house buyers faced a more uncertain economic environment following June’s Brexit vote."

Lending secured on dwellings rose by £3.4bn in January compared with a £3.7bn increase in December.

Meanwhile, consumer credit in January was up £1.42bn, in line with expectations, and compared with £1bn in December, but below the six-month average of £1.6bn. Growth was driven mainly by personal loans and credit card spending.

On an annual basis, however, the rate ticked down to 10.3% from 10.6% in December and 10.9% in November.

Lending to businesses bounced back in January, with non-financial firms borrowing a net of £3.7bn compared with a net repayment of £2.1bn the month before.