Home loan approvals up after six months of falls

Around 48,019 loans were approved for people buying a property during the month, up from 47,315 in October, according to the Bank of England.

The modest increase ends six consecutive months during which approvals for house purchase had declined, although the figure still remains well down on the 70,000 to 80,000 approvals a month which are considered to be consistent with a stable housing market.

The property economist at Capital Economics, Paul Diggle, said: "The Bank of England's measure of mortgage approvals for house purchase rose for first time in seven months in November.

"However, mortgage lending remains incredibly low by historical standards. This will continue to weigh on house prices in 2011."

Howard Archer, chief UK and European economist at IHS Global Insight, said: "While the Bank of England data show that mortgage approvals edged up in November, they remained at a very weak level and the modest increase does little to dilute our belief that house prices will remain under downward pressure in the early months of 2011 at least.

"What it does suggest is that house prices are more likely to trend modestly downward rather than crash."

The figures also showed an increase in the number of loans approved for people remortgaging, with these rising for the fifth consecutive month to 34,262, as competitive deals for homeowners with large equity stakes in their property continued to tempt people off their lenders' standard variable rates.

But net mortgage lending, which strips out redemptions and repayments, fell sharply during the month to 78m, down from 1.17bn in October.

The figures are currently highly volatile on a monthly basis, although November's total was slightly up on the recent six-month average of 800m.

Unsecured borrowing contracted by 121m during the month, as consumers continued to focus on repaying their debts.