Mortgage approvals for new house purchases climbed to their highest level since September 2007 in January, but lending to companies fell again, industry figures on Tuesday showed.
Government incentive schemes such as Help to Buy, which allows buyers to get 95% mortgages, helped drive up gross mortgage borrowing by 38% to £10.8bn during the month against January last year, the British Bankers Association (BBA)revealed.
House purchases were up 57% in January, while remortgaging rose 51%, the BBA said.
Unsecured borrowing lifted 0.7% over the year. Within that, a rise in card borrowing of 4.5% outstripped a contraction of 2.7% in personal loans and overdrafts. People spent £8.4bn on credit cards, 12.5% up on the same month a year ago.
But net lending to non-financial companies fell £317m in January, although the rate of decline slowed from the £920m decline in December.
BBA statistics director David Dooks said: ‘Following on from last month, mortgage borrowing continues to rise compared to a year earlier as mortgage
assistance schemes help first time buyers and housing chains more generally.
‘Approvals for new purchases have climbed quite significantly and are now at their highest point since September 2007.
‘Credit card spending is also on the rise, showing that consumer confidence in the economy continues to improve.’
via Mortgage approvals rise but business lending dips again, says BBA – Ifa Magazine.