Yet the Bank’s figures for December may signal a steady rise in lending to businesses, some analysts said.
“We think mortgage approvals slipped to 42,000 in the month,” said Deloitte’s Ian Stewart, while Howard Archer of IHS Global Insight has said that approvals are expected to fall to 45,000 – which would still be a 20 month low.
“This would be substantially below the 70,000--80,000 level that has been considered consistent with stable house prices,” Archer said, adding that the long term average (since 1993) stands at around 90,000 approvals per month.
House prices fell by 3.4 per cent last year, according to the Nationwide, which also releases its latest house price figures this week.
Net mortgage lending for December, announced by the Bank tomorrow, is forecast to have slowed to £0.7bn. “This is expected to be the consequence of both muted new mortgage activity as well as people making increased repayments,” Archer said.
However, the tight supply of credit to businesses could loosen through the year, even for small and medium-sized companies.
“The Bank’s latest credit conditions survey pointed to a continuing improvement in the availability of bank credit for private non-financial corporations,” said Jamie Dannhauser of Lombard Street Research.
“The most pronounced rise came in lending to small and medium-sized enterprises, with further easing expected in the first quarter of this year.” And a Deloitte survey “shows that demand for credit among larger UK corporates is starting to stir,” Stewart added.