'Sharp rebound' in mortgage approvals for home buyers

The number of mortgage approvals being made to home buyers jumped to a six-month high in January, Bank of England figures show.

There were 67,478 home loans approved for house purchase, marking the highest figure since July 2017.

The Bank also said the annual growth in consumer credit, which includes credit cards, personal loans and overdrafts, had slowed over the past year, to stand at 9.3% in January.

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Howard Archer, chief economic adviser at EY ITEM Club, said: "January's sharp rebound in mortgage approvals suggests that there may have been a hit to activity in December as a knee-jerk reaction to the Bank of England raising interest rates in November.

"It is also possible that the cutting of stamp duty for first-time buyers in the late-November's budget may have provided limited support to mortgage approvals in January."

Mr Archer also said January's sharp rebound in mortgage approvals highly likely overstated the current strength of the housing market just as December's drop overstated the weakness of housing market activity.

He said: "It should be noted that housing market activity can be particularly volatile around Christmas and New Year."

Responding to the consumer credit figures, Peter Tutton, head of policy at StepChange Debt Charity, said: "It's encouraging that consumer credit growth has steadied, but the fact remains that household debt levels are high, with 620,000 people contacting us for help last year.

"There is no place for complacency about the state of household finances, with two-fifths of the people we advised struggling to keep up with even basic bills like rent, utilities and council tax."