March 1, 2011 / 9:41 AM / 9 years ago

January mortgage approvals up more than expected

People view properties advertised for sale in the window of an estate agent in west London January 2, 2009. REUTERS/Stephen Hird

LONDON (Reuters) - Mortgage approvals picked up more than expected in January and mortgage lending rose to its highest in almost a year, Bank of England figures showed on Tuesday.

However, consumer credit contracted at its fastest pace in over a year and money supply growth remained weak, suggesting overall credit conditions remained far from normal at a time of economic uncertainty.

The Bank of England said mortgage approvals numbered 45,723 in January, up from 42,719 in December, a month that had been impacted by the country’s harshest cold snap in one hundred years. Analysts had forecast a reading of 43,000.

The figures tally with a survey from mortgage lender Nationwide on Tuesday which showed house prices rose unexpectedly in February.

However mortgage approvals are still running at only half their long-run average and few expect the housing market to gather pace in the coming months.

There was a 333 million pound contraction in consumer credit, suggesting Britons are keen to pay down debt at a time of public spending cuts and tax rises.

M4 money supply grew by 0.8 percent on the month but contracted 1.7 percent on the year, the fastest annual contraction since the series began in 1983.

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