Business

Mortgage approvals rose in March, says Bank of England

bank of england
Image caption The Bank of England argues that loan availability will improve

The number of people taking out new mortgages rose last month, according to figures from the Bank of England.

There were 53,504 mortgage approvals in the month of March, compared with fewer than 52,000 in February.

But the total was still below that reached in December 2012, when there were more than 55,000 approvals.

At the same time, the amount of lending to businesses was down by a further 3.6%, despite attempts by the Bank of England to boost such lending.

"The encouraging pointer is the rebound in mortgage approvals for house purchases," commented Philip Shaw, an economist with Investec.

"What isn't clear is whether approvals were depressed once again by cold weather conditions," he said.

'Slight' improvement

The Funding for Lending Scheme (FLS) has been criticised for failing to boost lending since it began in August 2012.

The idea is that banks can borrow money at a discount from the Bank of England, providing they can show they have passed it on to customers in the form of loans.

The Bank has always argued that it will take some time to have an effect, particularly with lending to businesses.

Earlier this month, the Bank announced that the scheme would be extended by an extra year, to January 2015.

But economists are uncertain as to whether FLS is helping to boost the availability of mortgages.

"There's been a very slight underlying improvement since last summer in approvals," said Ross Walker of RBS. "Maybe in part you could cite the FLS."

The bigger effect has been on mortgage rates, some of which have fallen significantly in the past few months.

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