"Looking at mortgage approvals, the recovery is encouraging, but there is still some way to go to get back to a level of normality"
- David McNamara, economist at Davy Research
U.K. mortgage approvals increased more than initially was expected last month, a sign the Bank of England's credit-boosting programme is having a positive impact on home loans. According to the figures from the Bank of England, 55,785 mortgages were approved for home buyers in December, reaching the highest level since July 2012 and higher than the previous month's reading of 54,011. Overall new lending stood at £1.69 billion ($2.66 billion) in December, compared with only £86 million in November. Wednesday's data suggest that the government backed Funding for Lending Scheme, which rewards banks, who increase their lending levels with access to cheaper funding, is having some success among customers, adding to signs that the property market is gaining momentum.
"The U.K. mortgage market is gradually thawing and should continue to do so, in part because of the BOE's FLS," said Rob Wood, an economist at Berenberg Bank in London and a former Bank of England official.
"Looking at mortgage approvals, the recovery is encouraging, but there is still some way to go to get back to a level of normality," said David McNamara, economist at Davy Research.
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