Bank of England reports 4pc rise in lending

Robyn Hall

March 1, 2013

Repayments in January amounted to £12.5bn compared to the previous six-month average of £11.3bn.

Meanwhile the number of loan approvals for house purchases decreased in January to 54,719 but was higher than the previous six-month average of 51,344.

And the number of approvals for remortgaging decreased in January to 25,573 and was below the previous six-month average of 27,527.

Brian Murphy, head of lending at MAB, said: “Despite a slight dip in the number of purchase loan approvals in the Bank of England figures the outlook for purchase mortgages remains positive. Overall the value stabilised at £8.2bn despite the traditional seasonal lull in the market.

“Over the coming months we expect to see activity grow from strength to strength with lenders seeking to improve their lending volumes above last year’s levels.”

Peter Williams, executive director of IMLA, said: “Today’s Bank of England figures were not entirely what we might have hoped for, given industry optimism about the general outlook for 2013. But while the number of approvals for house purchase and remortgage both fell, it is encouraging to see the value of purchase lending remained constant at £8.2bn.

“A drop in numbers is to be expected around the turn of the year, but the fact that the number of loan approvals for house purchase remained above the six month average suggests that overall conditions are continuing to improve.

“Brokers can certainly expect to see further rate cuts and product launches driving recovery and growth in the market. It will be interesting to see whether this month’s Budget brings any further initiatives to expand the Funding for Lending Scheme (FLS), promote higher loan to value (LTV) lending and address the continuing undersupply of housing.”

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