Mortgage approvals at highest rate since 2007
THE number of mortgage approvals granted to home buyers lifted to a new six-year high in January, Bank of England figures show.
Some 76,947 approvals with a total value of £12.4bn got the go-ahead last month, marking the highest number seen since November 2007.
However loans, including overdrafts, to non-financial businesses decreased by £600m in January, on top of the fall of £1.7bn seen in December.
And lending to small and medium-sized enterprises fell by £300m compared to the average monthly decrease of £500m over the previous six months.
The updated figures came as the bank said net lending to households and businesses under its Funding for Lending Scheme (FLS) remained positive, with £5.8bn lent in the final quarter of 2013. Cumulative net lending now stands at £10.3bn over the 18 months from the scheme's start in 2012.
While mortgage borrowing conditions have been eased by FLS, small businesses are still struggling to borrow much-needed cash.
The scheme was launched last summer, offering cheap finance to lenders to match the loans they provide for households and businesses.
But its success in boosting the housing market was not matched in the small and medium enterprise (SME) area, prompting policymakers to scrap the household element of the scheme in order to re-focus efforts on SMEs.
Lloyds Banking Group said it it grew its total lending through FLS by £4.2bn, more than other banks in the scheme so far in the quarterly updates.
Lloyds said: "We have committed £37bn to our customers through the scheme since September 2012, when we launched our FLS lending offers, which include a 1% discount on all our lending to SMEs."
The figures also show that Lloyds is the biggest net lender to SMEs, with more than £1.1bn of lending in the nine months from April to December 2013.
Despite the latest pick-up in household lending, mortgage approvals are still 25% below pre-crisis levels.