UK mortgage lending falls in February

Mortgage lending saw a surprise decline in February but credit conditions brightened for Britain’s smaller businesses, Bank of England figures showed today.

Banks and building societies made 70,309 loans for house purchase in February — well down on January’s six-year high of 76,753 — but analysts said the wet weather was a more likely cause than any underlying loss of momentum for the market.

“Conditions are very supportive for the housing market, with interest rates low, consumer confidence rising sharply and most housing indicators still riding high,” Berenberg’s UK economist Rob Wood said.

There was better news for small businesses in the figures as net lending — gross lending minus repayments — including overdrafts rose £159 million in February, the highest since June last year and much better than the average £400 million decline seen on average over the past six months. Lending to business overall was down £800 million, albeit less than the recent £1.9 billion average.