Increase in home loan approvals

The number of approvals for new house purchases has defiedexpectations by rising to its highest point in almost two years.

But economists warned of deals becoming more restricted as bankstighten lending conditions. Loan approvals for house purchase roseto 52,854 in November with a total value of Pounds 7.6 billion, thesecond monthly rise in a row and the highest figure since December2009, the Bank of England figures showed. But the number of loansfor remortgaging declined for the second month in a row to reach31,154, worth Pounds 4.1 billion overall, the lowest figure sinceJune last year.

Samuel Tombs of Capital Economics said the increase in newmortgage approvals from 52,786 a month earlier defied the widely-held expectation for a fall.

But he added: "We fear that approvals for new house purchasemight soon start to fall as banks further restrict the availability,and raise the price, of credit in response to the deterioration inwholesale funding markets." Meanwhile, the amount borrowed on creditcards was broadly unchanged in November, while other loans andadvances rose by Pounds 400 million.