January 4, 2013 / 9:37 AM / 7 years ago

November mortgage approvals highest since January

A sold sign hangs from a for sale board on a housing development in Manchester, northern England June 7, 2011. REUTERS/Phil Noble

LONDON (Reuters) - Lending to Britain’s consumers rose in November and British mortgage approvals for house purchase hit their highest since January last year, Bank of England data showed on Friday.

The central bank has been hoping that its Funding for Lending Scheme, opened in August, would boost the flow of credit to households and businesses, thus easing what it sees as a major drag on the economy.

Consumer credit rose by 0.1 billion pounds in November, but mortgage lending dropped by 0.2 billion, the data showed. Analysts had predicted a 0.1 billion pound drop in consumer credit and a 0.5 billion pound increase in mortgage lending.

The BoE said mortgage approvals numbered 54,036 in November - the highest in 10 months and up from 53,071 in October. Analysts had forecast a reading of 53,800.

Before the 2008 financial crisis, monthly mortgage approvals ran at around 90,000, but the number of home sales has slumped since then and the property market has ceased to be a major driver of consumer spending.

Last week similar data from the British Bankers’ Association showed a tick-up in mortgage approvals in November, although they were still 1.5 percent down on the year.

On Thursday a quarterly BoE survey found that British banks planned to increase the supply of mortgages in early 2013 after a record rise in the availability of this type of credit in the three months to December 11, partly driven by the FLS.

The poll also pointed to an improvement in terms on which loans are extended.

The BoE’s preferred gauge of money supply, M4 excluding intermediate other financial corporations, rose 0.3 percent on the month after a 0.4 percent increase in October, taking the annual growth rate to 4.5 percent.

Reporting by Olesya Dmitracova and Dasha Afanasieva

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