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Mortgages turn the corner

Date: 01 Feb 05

New mortgages increased in December after hitting a ten-year low in November.

The Bank of England has today revealed that 83,000 loans were approved for house purchases, a hefty increase on November's figures of 77,000.

This represented the first increase in the number of loans for house purchase for seven months.

However, analysts point out that this number is still historically low, and consistent with a stagnating housing market at best.

The Bank of England also found that total lending to individuals increased 0.8 per cent in December.

But the data does support the idea that there will not be a house price crash, and increases the likelihood that the Bank of England will keep the base rate of borrowing on hold in the immediate future.

"The modest rise in mortgage approvals and lending in December reinforces the impression that the housing market is currently slowing steadily rather than sharply," commented Howard Archer, chief UK economist at Global Insight.

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