ORTGAGE lending surged in January and consumer credit also expanded, official figures showed yesterday, though economists do not expect the jump to be sustained.
Analysts believe loans rose because the stamp duty holiday for first-time buyers ends later this month, prompting a short-term rise in loan applications, though numbers remain well below pre-recession levels.
The Bank of England’s data revealed a £1.8bn rise in lending to individuals, compared with a six-month average of £1.1bn monthly growth, largely focused in loans secured on homes.
Mortgage lending jumped £1.6bn – double the average £0.8bn increase over each of the last six months, and taking home-secured lending to £13.2bn.
Consumer credit increased by a much lower £0.1bn, less than the £0.3bn average seen over the last six months.
Credit card lending remained unchanged in the month, though it is down 0.2 per cent on the level seen three months ago.
Over the last 12 months, credit card debt grew 2.1 per cent – decelerating from growth of 2.3 per cent in the year to December and 2.5 per cent in the 12 months to November.
“Consumer credit remains very low compared to long-term norms which suggests that even though confidence has improved, there is still very low appetite for taking on new borrowing and also on ongoing strong desire of many people to reduce their debt,” said economist Howard Archer from IHS Global Insight
“Consumer desire to get a tight grip on their finances is clearly the consequence of still serious concerns over the outlook for the economy and jobs.”