House purchase approvals, seasonally adjusted, totalled 38,092 in January, up 4.2% on December and 34% year-on-year, according to the British Bankers’ Association (BBA), while remortgage approvals remained relatively flat at 21,129.
The average house purchase loan by the main high street banking groups, which account for two-thirds of all UK mortgage lending, was £144,400, slightly up on January 2011 and just £200 less than December’s average.
Approvals for other secured lending in January continued to decline, down 2.4% year-on-year at 15,029.
The BBA stats showed that gross mortgage lending was £8.3bn in January, down 6.7% on December, but 2.2% above total lending in January 2011 and equivalent to the previous six-month average.
Capital repayment remained high in January, with net mortgage lending of £0.7bn, flat month-on-month, but up 1.3% on an annual basis – outstripping the annual growth of 0.8% across the whole lending market last year.
Meanwhile, unsecured lending contracted by 1.6% over the 12 months to January, while personal deposits rose by 3.1%, down from the 4.9% growth seen over the year to January 2011.
BBA statistics director David Dooks said: “January saw the high street banks approve more mortgages for house purchase than of late, despite low household confidence, as some people try to complete transactions before the Stamp Duty holiday ends in March.
“Demand for unsecured personal borrowing remains low as consumers continue to repay debt. Business borrowing remains generally subdued as challenging trading and market conditions continue to suppress demand.”
William Hunter, of Hunter Wealth Management, commented: “The Stamp Duty holiday is clearly creating a surge in demand, but that’s all it will be. Beyond March the mortgage market is likely to click back into its default mode of flat. Welcome though this boost is, by definition it is finite.
“On a positive note, this at least shows that certain focused tax measures can drive activity and stimulate a market.
“In relation to debt generally, the theme remains much the same: people are keen to manage it down. Debt, the deity of the nineties and much of the noughties, is now anathema to the man in the street.
“Only once the economy and jobs market improve will we see the property market spark in any material way.”
