Mortgage approvals reach two-year high

MORTGAGE approvals rose to a two year high in December, official figures showed, as borrowers continued to reshrink their debts, repaying £400m in personal loans.

The Bank of England statistics revealed the largest repayment of personal loans since records began in 1993, as analysts said heightened concerns about the wider economy and jobs were making consumers lose their appetite for borrowing.

Credit card borrowing was also flat for the third month in a row according to the latest Bank of England figures, despite the Christmas season.

Despite the strong mortgage figures, experts warned that the housing market remains weak compared with long-term norms, and is likely to come under further pressure from unemployment and low confidence.

The number of loan approvals for house purchase rose to 52,939 in December, the highest figure since December 2009 and an increase of just over 300 on the November.