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29 Feb, 2008

BR>Published: 12:59 Friday 29 February 2008
By: Iain Martin , Reporter

Mortgage lending picked up by 2.7% in January but the number of approvals is at the same level as September 1995, according to the Bank of England.

Approvals for house purchase mortgages rose to 74,000 in January from 72,000 in December, but are still close to historic lows of 71,000 approvals in May 1995.

The value of mortgage lending also rose by £300 million to £10.3 billion in January but was far below the six-month average of £13.3 billion.

The number of remortgages has jumped by 26% since October, with 119,000 properties remortgaged in January compared to 88,000 in October. The value of remortgages rose by £2.5 billion in the space of a month, with £15.7 billion approved in January.

'The 74,000 approvals granted to home buyers during the month still remains close to historic lows and represents a 40% decline compared with January a year ago,' said Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors.

'The latest Bank of England mortgage data for January shows surprising strength given recent economic data and consumer confidence measures,' said Gary Styles, economics director at Hometrack.

'Reduced credit supply and repricing in the credit markets have changed the sentiment and outlook for the mortgage and housing market,' Styles said.

Styles welcomed a rise in mortgage volumes but said it was too early to say if the market had stabilized at a lower volume.

Hometrack predicted in November net lending would fall by 18% in 2008 to £85 billion.

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