Mortgage lending dips

The number of homebuyers taking out mortgages fell in February, after a strong start to the year, official figures showed today.

The Bank of England said 115,000 mortgages had been approved for house purchases over the month, compared with 122,000 in both January and December.

This is the first time the number of approvals has fallen since November 2004, although it remains at the level seen in April and May that year, when the housing market was booming.

The total value of these mortgages was also down, from £16bn in January to £15.2bn in February.

However the number and value of remortgages was up over the month. Some 104,000 remortgages were approved, 3,000 more than in January, and the total value was up from £10.9bn to £11.4bn.

Total lending to individuals in the UK grew by £9.5bn in February, a £0.6bn smaller increase than in January but in line with the average of the previous six months and up 10.3% on last February's figure.

Britons now owe a total of £1,174.4bn, the majority - £981.8bn - is debt secured on property, while £192.6bn in unsecured borrowing.

The amount lent in these others forms of consumer credit grew by £1.4bn in February, with credit card borrowing accounting for £0.5bn of the rise and the rest is made up of personal loans, overdrafts and other forms of borrowing.

The increase in consumer credit was slightly higher than the figure for January, when borrowing increased by £1.2bn, however the annual growth rate continued to fall as it has over the past year.

In February it stood at 8.7%, down from 13.8% in the same month last year.

The chief UK economist of consultancy Global Insight, Howard Archer, said the figures suggested a "modest loss of momentum".

He added: "Although the mortgage data are still robust, the softer data for February could be an early sign that the recent firming in house prices is starting to have a dampening effect on market activity.

"The data reinforce our suspicion that house prices will be unable to sustain sharp gains for an extended period."