The twelve-month growth rate increased by 0.1 percentage points to 1.0%. Within total lending, lending secured on dwellings rose by £1.6 billion, compared to the previous six-month average of £0.8 billion. The three-month annualised growth rate increased by 0.1 percentage points to 1.1%, while the twelve-month growth rate was unchanged at 0.8%.
Gross lending secured on dwellings was £12.8 billion in January, compared to the previous six-month average of £12.1 billion. Repayments in January were £11.7 billion, compared to the previous six-month average of £11.5 billion.
The number of mortgage approvals (58,728) increased in January, and was higher than the previous six-month average (52,839). The number of approvals for remortgaging (31,952) decreased in January, and was lower than the previous six-month average (33,039). The number of approvals for other purposes (19,679) also decreased in January, and was lower than the previous six-month average (20,717).
Consumer credit rose by £0.1 billion in January, compared to the previous six-month average increase of £0.3 billion. The twelve-month growth rate increased by 0.3 percentage points to 2.3%. Within consumer credit, credit card lending was broadly unchanged in January, whereas other loans and advances increased by £0.2 billion.
William Hunter of Hunter Wealth Management said:
"The noticeable spike in house purchase loans in January is consistent with other data released recently and reflects the rush to buy created by the stamp duty holiday. The number of new home loans will almost certainly settle down in the months ahead, as the mortgage market clicks back into conservative mode.
"Rising house prices, as reported by the Land Registry this week, will also weigh down on overall transaction levels. The drop in remortgages shows that homeowners are betting on rates staying where they are for quite some time yet. And given the challenges the economy still faces, they may well be on the money."
Brian Murphy, Head of Lending at Mortgage Advice Bureau, said:
“With inflation falling and greater availability of competitive products, more and more consumers are deciding they have waited long enough to – either purchase their first home or take the next step on the housing ladder. Today’s Bank of England Figures show this return to cautious optimism as well as the impact of the looming end to the Stamp Duty Exemption period.
“At Mortgage Advice Bureau, the number of mortgages arranged in January 2012 was 26% higher than in January 2011. Today’s news is welcome but with the Stamp Duty Exemption due to ceases in matter of weeks this may bring about something of a hiatus in activity for a period.”
Richard Sexton, director of e.surv chartered surveyors, said:
“The mortgage market is not fighting fit but it’s certainly soldiering on. Deposit requirements have fallen to their lowest since the Lehman collapse, and more first buyers are getting mortgages. But we can’t give it a clean bill of health.
"Tighter funding conditions lurk on the horizon and will constrict lending in the medium term. What’s more, the current lending figures are being artificially swollen by first time buyers rushing to beat the stamp duty deadline.
"So these figures don’t offer a true reflection of the state of the market, which is still riddled will all manner of ailments. If the end of the tax break for new buyers coincides with a deterioration in the economy, the first-timer market will seize up again and may well enter a state of rigor mortis. The landscape for the remainder of 2012 looks fraught with risk – it will be difficult for the market to navigate.”
David Brown, commercial director of LSL Property Services, comments:
"By pre-crunch standards, the level of mortgage lending in January was not spectacular by any means. But given the context of the current economic conditions and the ongoing eurozone crisis, a 7% monthly increase in house purchase lending is welcome sign of a strengthening mortgage market. The flurry of first-time buyers rushing to complete before the end of the stamp duty holiday will have played a part, but any increase in mortgage lending is also a demonstration of confidence in the market from lenders.
"With the slim prospects of any bank rate rise in the foreseeable future, Libor has been dipping again in recent weeks - which should help keep down mortgage rates on new products. As a result, the record affordability will continue to drive demand from both credit-worthy buyers and investors looking to take advantage of the favourable conditions in the rental market. "
Paul Hunt, managing director of Phoebus Software said:
“When one looks at the growth rate of mortgage lending over a long period, the current figures look positively anaemic – but in the context of the current economic situation the fact lending is increasing at all is very encouraging. The amount of money lent by mortgage lenders has exceeded that repaid by borrowers for nine consecutive months and lending volumes are growing too.
"Even when wholesale lending rates were rising at the end of last year, lenders have shown they are prepared
